Purchase Solution

I need help finding the answers to the questions attached, the class is the time value money

Not what you're looking for?

Ask Custom Question

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 !!!

Purchase this Solution

Solution Preview

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 = ...

Purchase this Solution


Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.