Question: solve for For each subsequent year (1-5), the practice earns $2000. However, these future earnings are worth less in today's dollars due to the time
solve for For each subsequent year (1-5), the practice earns $2000. However, these future earnings are worth less in today's dollars due to the time value of money. This is why we discount them using a discount rate (15% in this case). The formula for calculating the present value (P.V) is: P.V = Future Value / (1 + r)^n, where r is the discount rate and n is the number of periods
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