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Dismiss All Please Wait . . . Please Wait... Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 9%, consider the

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Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 9%, consider the present and future values of this gift, depending on when you become engaged.

Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money.

Date Received

Present Value

Value in One Year

Value in Two Years

(Dollars)

(Dollars)

(Dollars)

Today 1,000.00 selector 1

917.43

1,090.00

1,188.10

1,295.03

selector 2

841.68

1,008.10

1,090.00

1,188.10

In 1 year selector 3

841.68

917.43

1,090.00

11,111.11

1,000.00  
In 2 years selector 4

841.68

917.43

1,188.10

123,456.79

  1,000.00

Points:

Close Explanation

Explanation:

Now complete the first column of the previous table by computing the present value of the gift if you get engaged in one year or two years.

The present value of the gift is selector 1

greater

smaller

if you get engaged in two years than it is if you get engaged in one year.

Aug 23 2021 View more View Less

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