Final answer:
The present value of Jacob's loan payment is $8,700, Tommy's bond is $4,104, and Steve's loan repayment is $9,780, all rounded to the nearest dollar.
Step-by-step explanation:
To calculate the present value of payments to be made in the future, we can use the formula PV = FV / (1 + r)^n, where PV is the present value, FV is the future value of the payment, r is the annual interest rate (as a decimal), and n is the number of years until the payment will be made.
For Jacob's student loan with a future payment of $10,358 at a 6% interest rate after three years, the present value calculation is as follows:
PV = $10,358 / (1 + 0.06)^3
PV = $10,358 / (1.191016)
PV = $8,700 (rounded to the nearest dollar)
Tommy's government-issued bond, with a future payment of $4,762 at a 3% interest rate after five years, would have a present value of:
PV = $4,762 / (1 + 0.03)^5
PV = $4,762 / (1.159274)
PV = $4,104 (rounded to the nearest dollar)
Lastly, Steve's small business loan, with a future payment of $14,681 at a 7% interest rate in six years, has a present value given by:
PV = $14,681 / (1 + 0.07)^6
PV = $14,681 / (1.501002)
PV = $9,780 (rounded to the nearest dollar)