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Finance: Discounting.

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1. At an interest rate of 12%, the six-year discount factor is .507. How many dollars is $.507 worth in six years if invested at 12%?

2. If the PV of $139 is $125, what is the discount factor?

3. If the cost of capital is 9%, what is the PV of $374 paid in year 9?

4. A project produces a cash flow of $432 in year 1, $137 in year 2, and $797 in year 3. if the cost of capital is 15%, what is the project's PV?

5. If you invest $100 at an interest rate of 15%, how much will you have at the end of eight years?

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Solution Summary

The problem deals with discounting under finance.

Solution provided by:
Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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