Thompson Company has acquired a machine from a dealer that requires a payment of $45,000 at
the end of five years.This transaction includes interest at 8%,compounded semiannually.What is the
value of the machine today?

Question

Quizplus · Accepted Answer

Present Value = Future Value * Interest Factor
Present Value = $45,000 * 0.6756 = $30,402
0.6756 is the interest factor on the Present Value table; n = 5*2=10; i = 8%/2= 4%

Thompson Company Has Acquired a Machine from a Dealer That