You will receive $12000 over the next 4 years. You can expect a 12% interest rate....

You will receive $12000 over the next 4 years. You can expect a 12% interest rate. You will receive $6000 in year 1 and your amount will decrease by $2000 each year. What is the present value of your money?

Expert Solution

Summary

Basically the question deals with the concept of Time value of Money. Here , the amount received after 1 year is not as worth as it is recived today.Hence, to depict in numerical value, we use discounting the amount with relevant market interest rates.

jeff jeffy answered 2 years ago

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