Cash Flow

Interest Rate

Present Discounted Value

(Choose from above) is based on the notion that a dollar paid in the future is less valuable than a dollar paid today.

Part 2

The present value of a loan in which

$5000

is to be paid out a year from today with the interest rate equal to

1%

is

$enter your response here.

(Round your response to the neareast two decimal place)

Part 3

If a loan is paid after two years, and the amount

$5000

is to be paid then with a corresponding

4%

interest rate, the present value of the loan is

$enter your response here.

(Round your response to the neareast two decimal place)