Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The concept of present value: If you put money in the bank with an annual interest rate of 5% then, $100 invested today 5% interest

The concept of present value:

If you put money in the bank with an annual interest rate of 5% then, $100 invested today 5% interest rate paid by the bank 5.00 interest paid by the bank $105 Amount of your money in the bank after 1 year.

So in the above example the present value is $100 and the future value is $105.

Is this how present value works?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

MP Auditing And Assurance Services W/ACL Software CD ROM A Systematic Approach

Authors: William Messier Jr, Steven Glover, Douglas Prawitt

9th Edition

1259162346, 978-1259162343

More Books

Students also viewed these Accounting questions

Question

cswa a 0 0 0 0 5 draftic competiencied to create drawing view b

Answered: 1 week ago