Problem: Time Value of Money For each of the following questions, assume a disco

ID: 2814332 • Letter: P

Question

Problem: Time Value of Money For each of the following questions, assume a discount rate of 5%.

a) What is the value today of $1,000 received in one year?

b) What is the value in one year of $1,000 received today?

c) What is the value today of $1,000 received in five years?

d) What is the value in five years of $1,000 received today?

e) What is the value today of $100 received at the end of each of the next five years?

f) What is the value in five years of five annual payments of $100, beginning one year from today?

g) What is the value today of $10 yearly payments, beginning in one year, continuing forever?

h) What is the value in five years of $10 yearly payments, beginning in one year, continuing forever?

a) What is the value today of $1,000 received in one year

=1000/(1+5%)^1=952.38

b) What is the value in one year of $1,000 received today=1000*(1+5%)^1=1050.00

c) What is the value today of $1,000 received in five years

=1000/(1+5%)^5=783.53

d) What is the value in five years of $1,000 received today

=1000*(1+5%)^5

=1276.28

the above is answer..

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