Chapter 18 - Assignment 1: Present Discounted Value
Chapter 18 - Assignment 1: Present Discounted Value
The Future Value Calculator provided by Financial Players Center, Inc., computes the present value of a given future balance.
- Use this calculator to compute the present discounted value of $1,000 that is received in 5 years when the interest rate is 5% (assume that interest is received only once per year, so the "Periods per year" should equal 1.).
- Repeat (a), but assume that the interest rate is 10%. How does an increase in the interest rate affect the present discounted value of a future payment?
- Repeat (a), but assume that the payment is received in 10 years. How does this affect the present discounted value of this payment?
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