Using a present value table, your calculator, or a computer program present value function, verify that the

Question:

Using a present value table, your calculator, or a computer program present value function, verify that the present value of $100,000 to be received in five years at an interest rate of 16%, compounded annually, is $47,610. Calculate the present value of $100,000 for each of the following items (parts a–f ) using these facts, except
a. Interest is compounded semiannually.
b. Interest is compounded quarterly.
c. A of 12% is used.
d. A of 20% is used.
e. The cash will be received in three years.
f. The cash will be received in seven years.

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...