a. What is the value of your investment two years from now? Multiply$5,000 by .926 (one year's discount rate at 8 percent).
b. What is the value of your investment one year from now? Multiply your answer to part a by .926 (one year's discount rate at 8 percent).
c. What is the value of your investment today? Multiply your answer to part b by .926 (one year's discount rate at 8 percent).
d. Confirm that your answer to part c is correct by going to Appendix B (present value of $1) for n=3 and i=8 percent. Multiply this tabular value by $5,000 and compare your answer to part c. There may be a slight difference due to rounding.
2. If you invest $9,000 today, how much will you have:
a. In 2 years at 9 percent?
b. In 7 years at 12 percent?
3. Your uncle offers you a choice of $30,000 in 50 years or $95 today. If money is discounted at 12 percent, which should you choose?
Recently Asked Questions
- What is the change in temperature if a solution initially at 45.2 degree cellulose dropped to 35.9 degree cellulose after a reaction occurred?
- The Center for Disease Control has reported that 47% (p=0.47 p=0.47) of U.S. adults (over the age of 30) have periodontal disease. We plan to take a random
- Need help in making a study guide for my law exam. meaning; examples; purpose. Thanks ?