Estimate present value, Financial Accounting

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Calculating Present Value [LO1]  An investment will pay you $43,000 in 10 years.  If the appropriate discount rate is 7 percent compounded daily, what is the present value?


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Calculating Present Value [LO1]  An investment will pay you $43,000 in 10 years.  If the appropriate discount rate is 7 percent compounded daily, what is the present value?

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Present value of a perpetuity, PVA ∞ = A(1 + k) -1 +  A(1 + k) -2 +..... ...

PVA ∞ = A(1 + k) -1 +  A(1 + k) -2 +..... + A(1 + k ) ∞ + 1 + A (1 + k) ∞ Multiplying both the sides of Eq (a7) by (1+k) provides: PVA ∞  = (1 +k) = A(1 +k) +A (1 +k)

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