I need help finding the answers to the questions attached, the class is the time value money
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How do i compute the PRESENT VALUE of a$100 cash flow for the following combinations of discount rates and times?
a. r=8 percent t= 10 years
b. r=8 percent t= 20 years
c. r=4 percent t=10 years
d. r=4 percent t=20 years
And how do I compute the FUTURE VALUE for a $100 cash flow for the same combination of rates and times as in the above problem?
I am not familiar with all of the abbreviations (for example the r means rate) if there are more abbreviations can you help me with the meaning?
Also how do I find the Interest rate implied by the following combinations of PRESENT and FUTURE VALUE?
PRESENT VALUE YEARS FUTURE VALUE
$400 11 $684
$183 4 $249
$300 7 $300
And how do I find the NUMBER OF PERIODS, how long will it take for $400 to grow to $1,000 at the interest rate specified?
a. 4 percent
b. 8 percent
c. 16 percent
Your help is GREATLY appreciated Thank you !!!
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How do i compute the PRESENT VALUE of a$100 cash flow for the following combinations of discount rates and times?
a. r=8 percent t= 10 years
b. r=8 percent t= 20 years
c. r=4 percent t=10 years
d. r=4 percent t=20 years
The formula is
PRESENT VALUE = FUTURE VALUE / (1+r)^t
Where "^" means "to the power of"
Then
a. PV = 100 / (1+8%)^10 = $46.32
b. PV = 100 / (1+8%)^20 = $21.45
c. PV = 100 / (1+4%)^10 = ...
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