Question

In: Finance

If the present value of $149 is $135, what is the discount factor? If that $149...

If the present value of $149 is $135, what is the discount factor? If that $149 is received in year 5, what is the interest rate? I need help with the second part I understand the discount factor. I dont know how to set it up and solve

Solutions

Expert Solution

PV= FV/(1+r)T

PV=$135

FV=$149

T=5

135=149/(1+r)5

(1+r)5   = 1.103703 (discount factor)

1+r=(1.103703)1/5

1+r=1.0199303

r=1.993%


Related Solutions

a. If the present value of $143 is $129, what is the discount factor? b. If...
a. If the present value of $143 is $129, what is the discount factor? b. If that $143 is received in year 5, what is the interest rate?
what is the relationship between the present value factor and the annuity present value factor
what is the relationship between the present value factor and the annuity present value factor
2)What is the relationship between the present-value factor and the annuity present-value factor? 3)What will $5,000...
2)What is the relationship between the present-value factor and the annuity present-value factor? 3)What will $5,000 invested for 10 years at 8 percent compounded annually grow to? How many years will it take $400 to grow to $1,671 if it is invested at 10 percent compounded annually? At what rate would $1,000 have to be invested to grow to $4,046 in 10 years? 7)What is the future value of an ordinary annuity of $1,000 per year for 7 years compounded...
1. What is the relation between the present value factor and the future value factor?
1. What is the relation between the present value factor and the future value factor?
Compounding and Discount Factor (Natural Resource Extraction) 1. Explain present value of benefit and future value cost.
Compounding and Discount Factor (Natural Resource Extraction)1. Explain present value of benefit and future value cost.2. Assume you put 20,000 dollars (principal) in a bank for the interest rate of 4%. How much money will bank give you after 10 years?3. Assuming the discount rate of 10%, present value of 100 dollars which will be received in 5 years. Calculate that value will be recerived.4. Suppose the timber deposits have a value with RM20000 today and have an alternative rate...
What is the present value of RM2,400 a year at a discount rate of 8% if...
What is the present value of RM2,400 a year at a discount rate of 8% if the first payment is received 7years from now and you received a total of 25 annual payments?
Given a discount rate of 13 ​percent, what is the present value of a perpetuity of...
Given a discount rate of 13 ​percent, what is the present value of a perpetuity of ​$1,400 per year if the first payment does not begin until the end of year​ 10?
What is the present value of $1,400 a year at a discount rate of 8 percent...
What is the present value of $1,400 a year at a discount rate of 8 percent if the first payment is received 7 years from now and you receive a total of 25 annual payments? Question 5 options: $9,417.69 $9,238.87 $9,333.33 $9,420.12 $9,881.72
What is the present value of a perpetuity of $80 per year if the discount rate...
What is the present value of a perpetuity of $80 per year if the discount rate is 11%?
What is the present value of $100 per month at a discount rate of 6%, if...
What is the present value of $100 per month at a discount rate of 6%, if the first payment is received 5 years from now and the last payment is received 18 years from now? Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity of $100 per month if the first payment does not begin until the end of year five? You are planning to save for retirement over the next 25 years....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT