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EX 4.2 What is the present value of $2,900 due in 18 years at a 6 percent interest rate and 11 percent interest rate? Do
EX 4.2 What is the present value of $2,900 due in 18 years at a 6 percent interest rate and 11 percent interest rate? Do not round intermediate calculations. Round your answers to the nearest cent.Present value at 6%: $
Present value at 11%: $
Explain why the present value is lower when the interest rate is higher.
- The less interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the more you need to invest today to receive a particular amount in the future.
Present value at 6%: $
Present value at 11%: $
Explain why the present value is lower when the interest rate is higher.
- The less interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the more you need to invest today to receive a particular amount in the future.
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Broadcasting Finance In Transition
Authors: Jay G. Blumler, T. J. Nossiter
1st Edition
0195050894, 978-0195050899
