Question: EXERCISE 12A1 Basic Present Value Concepts [LO5] In three years, when he is discharged from the Air Force, Steve wants to buy an $8,000 power

EXERCISE 12A–1 Basic Present Value Concepts [LO5]

In three years, when he is discharged from the Air Force, Steve wants to buy an $8,000 power boat.

Required:

What lump-sum amount must Steve invest now to have the $8,000 at the end of three years if he can invest money at:

1. Ten percent?

2. Fourteen percent?

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