Present Value Examples 1.You have $200,000 to invest. You could invest in a rental house which will return you $8,000 per year for 10 years and be worth $350,000 at the end or in a stock which you think will be worth $ 300,000 in 5 years. Which would you pursue if your RRR is 8%?2.Using a discount rate of 10%, would you rather have $20,000 per year for 5 years or $70,000 today?3.You have 40 years until retirement and expect, on average, an 8% return on your retirement investments. How much will you need to save each year in order to retire with $2,000,000?4.You only have 20 years until retirement: how much do you have to save each year in order to retire w/ $2,000,000?5.You have 40 years until retirement but don’t want to save annually: how much do you invest today to have the same $2,000,000 when you retire at 8%?6.You have a business opportunity that you are considering and have the following
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