Final answer:
The present value of $15,000, which will be received in 5 years with a 10% annual interest rate compounded daily, is roughly $9,104.92.
Step-by-step explanation:
To calculate the present value of an investment that will pay $15,000 in 5 years with a 10 percent discount rate compounded daily, we can use the formula for present value which is:
Present Value = Future Value / (1 + r/n)nt
Where:
- Future Value = $15,000
- r = 10% or 0.10 (discount rate)
- n = 365 (number of times the interest is compounded per year)
- t = 5 years
Plugging these values into the formula gives:
Present Value = $15,000 / (1 + 0.10/365)365*5
Doing the calculations:
Present Value = $15,000 / (1 + 0.00027397260)1825
Present Value = $15,000 / (1.64700950183)
Present Value = $9,104.92
Thus, the present value of $15,000 to be received in 5 years at a 10 percent interest rate compounded daily is approximately $9,104.92.