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# 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 !!!

#### 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 = ...

\$2.49