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present value concept 1. what single investment made today earning 10% annual interest, will be worth $5000 at the end of six years?

present value concept

1. what single investment made today earning 10% annual interest, will be worth $5000 at the end of six years?

2. What is the present value of $5000 to be received at the end of 6 years if the discount rate is 10%?

3. What is the most you would pay today for a promise to repay you $5000 at the end of 6 years if your opportunity cost 10%?

Compare, contrast, and discuss your findings in parts 1 through 4.

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Answer
1. What single investment made today earning 10% annual interest, will be worth
$5000 at the end of six years?
Amount = P
$5,000 = P (1+.1)6
$5,000 / 1.771561 = P
P = $2,822.37
2. What is...

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