What is “discounting,” and how is it related to compounding? How
is the future value equation related to the present value equation?
How does the present value of a future payment change as the time
to receipt is lengthened? As the interest rate increases? Using
your results to address these questions. Suppose a risk-free bond
promises to pay $2,249.73 in 3 years. If the going risk-free
interest rate is 4%, how much is the bond worth today? ($2,000) How
much...