Explore BrainMass

Explore BrainMass

    Formula for Present Value and Sample Calculation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The concept of present value gives the equivalent in dollars available immediately to a payment that is made at some point in the future.

    What amount of money today is equivalent to $1,100 one year from now, if banks are paying an interest rate i = 10% per year? In other words, what is the present value of $1,100 received one year from now, when interest rates are 10%? Show all calculations.

    © BrainMass Inc. brainmass.com October 10, 2019, 4:45 am ad1c9bdddf

    Solution Summary

    This solution gives the formula for the present value of a future payment, and gives a sample calculation showing all work.