You expect to receive a payment of $104 one year from now. a. Your discount rate is

Question:

You expect to receive a payment of $104 one year from now.
a. Your is 4 percent. What is the present value of the payment to be received?
b. Suppose that your rises to 5 percent. What is the present value of the payment to be received?
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...