Zhang Company has a loan agreement that provides it with cash today, and the company must pay $25,000 4 years from today. Zhang agrees to a 6% interest rate. The present value of 1 (single sum) for 4 periods at 6% is 0.7921. What is the amount of cash that Zhang Company receives today?
What will be an ideal response?
$25,000 * 0.7921 = $19,802.50
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What will be an ideal response?
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