If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years?
Explain how to apply discounted cash flow techniques to determine the value of money.© BrainMass Inc. brainmass.com October 17, 2018, 1:45 am ad1c9bdddf
This solution explains and calculates how to determine the future value of a single payment, as well as how to determine the value of money by applying discounted cash flow techniques.
Calculating present and future values..
Q12 What is the economic value today of each of the following payment streams if money can earn 7.5%.
a. $1000, $3000, and $2000 due in one, three, and five months, respectively.
b. Two $3000 payments due two and four months from now.
Q14 Ninety days ago Stella signed an agreement with Manon requiring her to make three payments of $400 plus interest 90, 150, and 210 days, respectively, from the date of the agreement. Each payment was to include interest on the $400 principal at the rate of 13.5% from the date of the agreement. Stella now wants Manon to renegotiate the agreement and accept a single payment 30 days from now, instead of the three scheduled payments. What payment should Manon require in the new agreement if money is worth 8.5%?View Full Posting Details