Question

Polly sells goods to customers in exchange for a $10,000 noninterest-bearing note due in 3 years. The interest rate on this type of loan is 6%. What is the present value of the note

Answer 1

present value = $8396.19

Step-by-step explanation:

given data

cash flow = $10,000

rate r = 6 %

time period t = 3 years

to find out

present value of the note

solution

we get here present value that is expressed as

present value =
`(cash\ flow)/((1+r)^t)` ....................1

put here value and we will get present value

present value =
`(10000)/((1+0.06)^3)`

solve it we get

present value = $8396.19