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. You are going to receive $205,000 in 18 years. What is the difference in present value between using a discount rate of 12 percent versus 9 percent?

Respuesta :

Answer:

Difference of present values

= 43458.72 - 26658.12

= $16,800.60

Step-by-step explanation:

Future Value = $205,000.00

Number of years = 18

Rate = 12% and 9%

Present value at 9%

= 205000 / 1.09^18

= $43,458.72

Present value at 12%

= 205000 / 1.12^18

= $26,658.12

Difference of present values

= 43458.72 - 26658.12

= $16,800.60

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