Explore BrainMass
Share

Explore BrainMass

    Present Value of Money

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

    A. What single investment made today, earning 12% annual interest, will be worth $6,000 at the end of 6 years?

    B. What is the present value of $6,000 to be received at the end of 6 years if the discount rate is 12%

    C. What is the most you could pay today for a promise to repay you $6,000 at the end of 6 years if your opportunity cost is 12%?

    D. Compare, contrast, and discuss your findings in parts a through c.

    © BrainMass Inc. brainmass.com October 9, 2019, 9:14 pm ad1c9bdddf
    https://brainmass.com/math/consumer-mathematics/present-value-of-money-177855

    Solution Preview

    n = 6, i = 12% = 0.12

    (A) P = A / [(1 + i)^n]

    P = 6000 / [(1 + ...

    Solution Summary

    Problem solved

    $2.19