A record collector has agreed to sell her entire collection to a historical museum in three years at a price of $100,000. The current appropriate interest rate is 7 percent. At what price should she value her collection today

Based on the information given the  price should she value her collection today is $81,629.79.

Using this formula

Future value = Present value × (1 + interest rate)^Time

Using the formula to solve for PV

$100,000 = PV× (1 + 0.07)³

PV= $100,000 ÷ (1.07)³

PV=$100,000÷1.225043

PV= $81,629.79

Inconclusion the  price should she value her collection today is $81,629.79.

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$81,629.79

Explanation:

According to the situation, the solution to the price that valued her collection today is as follows

Future value = Present value × (1 + interest rate)^number of years

$100,000 = Present value × (1 + 0.07)^3

So, the present value is

= $100,000 ÷ (1.07)^3

= $81,629.79

Hence, the price she valued her collection today is $81,629

The correct answer is:

None of the above (d)

Explanation:

Depreciation is the reduction in the fair value of an asset over time.

cost of van = $16,000

residual value = $2,000

useful life = 5 years

depreciation using straight-line allocation is allocating the depreciation cost equally over the useful life of the asset.