Unformatted text preview: The rate of discount is calculated as the extent of difference in valuation. Normally the rate of interest also acts as a rate of discount. In the above example the amount of $1100 an year ahead is equivalent to $1000 today. This way, the present value of the future income has been discounted by 10 percent....
View Full Document
This note was uploaded on 11/26/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.
- Fall '10