The Solution to This Problem Requires Time Value of Money

question 140

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. A company will have to pay a $50,000 liability in 4 years.How much must be deposited now into a bank account earning 8% compounded semiannually to fully fund the future payment?

• A) $34,000
• B) $35,500
• C) $36,523
• D) $36,550

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