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Q: What is the present value of 100 to be received at the end of two years if the discount rate is 12 percent?

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$5,790

The formula for the present value of an annuity due. The present value of an annuity due is used to derive the current value of a series of cash payments that are expected to be made on predetermined future dates and in predetermined amounts.

Present Value Interest Factor, abbreviated as PVIF and is used to simplify present value computations, may be computed as follows: PVIF = 1 / ( ( 1 + r) ^ t) where... r = interest discount rate t = number of periods

because the rate of discount is being increased therefore the original amount lets say $500 no longer remains the same nor does it raise or stay the same.

If you're simply adding five percent onto the value at the end of each of the three years - the final value would be 578.8125

Related questions

What is the present value of 500 to be recieved 10 yrs from today if it is discount at the rate of 6 percent?

i think the present of 700 is 700%

$5,790

the net present value as determined by normal discount rate is 10%

As, the present value of future cash flows is determined by the discount rate, so increase or decrease in the discount rate will affect the present value. Discount rate is simply cost or the expense to the company,so in simplest terms, discount rate goes up, cost goes up,so this will lower the present value of cash flows. Assumes a discount rate of 5%,to discount $100 in one years time: Present Value=$100 * 1/(1.05) =$95.24 Ok,as you say,if the discount rate becomes higher,let's say 8%: Present Value=$100 * 1/(1.08) =$92.6 so, the higher the discount rate, the lower the present value.

The discount value is $11.99 and the sale price is $67.99

A discount is when the value of an item is brought down. The discount can sometimes be expressed in terms of a value, or in terms of a percentage, for example, a 50% discount means that the value of the item is reduced by 50 percent, or a half.

It depends on what discount rate you're using.

yes they are the same

Present value of tax saving = 5 million * 0.34 / 1.1 Present value = 1700000 / 1.1 Present value = 1545455

A discount is when the value of an item is brought down. The discount can sometimes be expressed in terms of a value, or in terms of a percentage, for example, a 50% discount means that the value of the item is reduced by 50 percent, or a half.

Present value of streams can be found by dividing the streams with 4 percent interest rate for example if stream is 100 then present value will be present value = 100 / .04

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