Sharon Smith will receive $1 million in 50 years. The discount rate is 14. As an alternative,

Question:

Sharon Smith will receive $1 million in 50 years. The is 14. As an alternative, she can receive $2,000 today. Which should she choose? Provide two solutions for this question (Base your answer on present value calculations for the $1 million, and calculations for the $2,000. Use the tables in the back of your text, and show all work/calculations/formulas.)

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...