Calculate the present value of the income stream given below assuming a discount rate of 8 percent What happens to value if the discount rate increases to 20 percent Year Income S3 000 2 S4,000 S6,000 4 1,(X 4S1 000...

This problem is solved by entering the annual income stream and dis ...

Calculate the present value of the income stream given below assuming a discount rate of 8 percent.

Question:

Calculate the present value of the income stream given below assuming a of 8 percent. What happens to value if the increases to 20 percent?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...