Present value conceptAnswer each of the following questions.

a. What single investment made today, earning 9% annual interest, will be worth $5,300 at the end of 4

years?

b. What is the present value of $5,300 to be received at the end of 4 years if the discount rate is 9%?

c. What is the most you would pay today for a promise to repay you $5,300 at the end of 4 years if your opportunity cost is 9%?

d. Compare, contrast, and discuss your findings in part a through c

a. A single investment made today, earning 9% annual interest, worth $5,300 at the end of 4 years is $ (Round to the nearest cent.)

b. The present value of $5 comma 3005,300 to be received at the end of 44 years, if the discount rate is 9% is $ (Round to the nearest cent.)

c. The most you would pay today for a promise to repay you $5,300 at the end of 4 years if your opportunity cost is 9% is $(Round to the nearest cent.)

d. Compare, contrast, and discuss your findings in part a through c. (Select all answers that apply.)

A. In parts a and c, $5,300 is the future value, FV.

In part b, $5,300 is the present value, PV. Therefore, parts a and c have the same answer, while part b has a different answer.

B. The annual interest rate is also called the discount rate or the opportunity cost.

C. In all three cases, the answer is $3,754.65. In part a, it is the payment, PMT. In part b, it is the present value, PV. In part c, it is the future value, FV.

D. In all three cases, you are solving for the present value, PV, which is $3,754.65