Question
You will receive $10,600 three years from now. The discount rate is 8 percent. A. What is the value of your investment two years from
You will receive $10,600 three years from now. The discount rate is 8 percent.
A. What is the value of your investment two years from now? Multiply $10,600 (1/1.08) or divide by 1.08 (one years discount rate at 8 percent).
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
B. What is the value of your investment one year from now? Multiply your answer to part a by (1/1.08)
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
C. What is the value of your investment today? Multiply your answer to part b by (1/1.08).
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
D. Use the formula PV = FV (1/(1+i)n) to find the present value of $10,400 received three years from now at 8 percent interest.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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