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Present Value of Money

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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.

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n = 6, i = 12% = 0.12

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

P = 6000 / [(1 + ...

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