Question: Can someone explain this to me!!!! How do they get 0.7938???? Examples of Present Value: 1. Suppose I want to invest a certain amount of

Can someone explain this to me!!!! How do they get 0.7938????

Examples of Present Value: 1. Suppose I want to invest a certain amount of money today for my child's college education, to make sure I will have $10,000 when she leaves for college in 3 years. If I expect to earn 8% interest in my investment, how much do I need to invest today? aig 10 VAM Answer: I am solving for the present value of a single sum ($10,000). See Appendix A for present value factor: PV single sum = $10,000 x (PV ss n = 3 periods, interest rate = 8%) = (10,000 x 0.7938) = $7,938

Examples of Present Value: 1. Suppose I want to invest a certain amount of money today for my child's college education, to make sure I will have $10,000 when she leaves for college in 3 years. If I expect to earn 8% interest in my investment, how much do I need to invest today? Answer: I am solving for the present value of a single sum ($10,000). See Appendix A for present value factor: PV single sum = $10,000 x (PV ss n = 3 periods, interest rate = 8%) (10,000 x 0.7938) = $7,938 =

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