Exercise A3-19 (Algorithmic) Present Values

Use Present Value Tables or your calculator to complete the requirements below.

You have an opportunity to purchase government security that will pay $198,000 in 5 years.

Required:

Round your answers to the nearest cent, if rounding is required.

1. Calculate what you would pay for the security if the appropriate interest (discount) rate is 6% compounded annually. $_____________

2. Calculate what you would pay for the security if the appropriate interest (discount) rate is 10% compounded annually. $_____________

3. Calculate what you would pay for the security if the appropriate interest (discount) rate is 6% compounded semiannually. $______________