Question
In: Finance
a. What is the present value of $30,000 received 5 years from now? Assume a rate...
a. What is the present value of $30,000 received 5 years from now? Assume a rate of 6%?
b. To what value would $30,000 grow, compounded annually in 5 years assuming a discount rate of 4%?
Solutions
Expert Solution
a. The present value is computed as follows:
= Future value / (1 + r)n
= $ 30,000 / 1.065
= $ 22,417.75
b. The value is computed as follows:
= Present value x (1 + r)n
= $ 30,000 x 1.045
= $ 36,499.59
jeff jeffy answered 2 years agoRelated Solutions
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