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Time Value of Money

You have graduated and need a new car. Uncle Henry will lend you the money if you pay him back in 4 years and offer to pay him the rate of interest that he would get by putting his money in a savings account. You can pay him $5000 in year 1 and then $8000 each year for the next 3 years. If Uncle Henry otherwise earn 6% per year on his savings, how much can you borrow from him?

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so basically what you need to do is to find the present values of all the money that you can pay him back in 4 years.

for the first year you ...