# Question: You will receive 6 800 three years from now The discount

You will receive $6,800 three years from now. The discount rate is 10 percent.

a. What is the value of your investment two years from now? Multiply $6,800 × .909 (one year’s discount rate at 10 percent).

b. What is the value of your investment one year from now? Multiply your answer to part a by .909 (one year’s discount rate at 10 percent).

c. What is the value of your investment today? Multiply your answer to part b by .909 (one year’s discount rate at 10 percent).

d. Confirm that your answer to part c is correct by going to Appendix B (present value of $1) for n = 3 and i = 10%. Multiply this tabular value by $6,800 and compare your answer to part c. There may be a slight difference due to rounding.

a. What is the value of your investment two years from now? Multiply $6,800 × .909 (one year’s discount rate at 10 percent).

b. What is the value of your investment one year from now? Multiply your answer to part a by .909 (one year’s discount rate at 10 percent).

c. What is the value of your investment today? Multiply your answer to part b by .909 (one year’s discount rate at 10 percent).

d. Confirm that your answer to part c is correct by going to Appendix B (present value of $1) for n = 3 and i = 10%. Multiply this tabular value by $6,800 and compare your answer to part c. There may be a slight difference due to rounding.

**View Solution:**## Answer to relevant Questions

If you invest $9,000 today, how much will you have?a. In 2 years at 9 percent?b. In 7 years at 12 percent?c. In 25 years at 14 percent?d. In 25 years at 14 percent (compounded semiannually)?How much would you have to invest today to receive:a. $15,000 in 8 years at 10 percent?b. $20,000 in 12 years at 13 percent?c. $6,000 each year for 10 years at 9 percent?d. $50,000 each year for 50 years at 7 percent?The Clearinghouse Sweepstakes has just informed you that you have won $1 million. The amount is to be paid out at the rate of $20,000 a year for the next 50 years. With a discount rate of 10 percent, what is the present ...Juan Garza invested $20,000 10 years ago at 12 percent, compounded quarterly. How much has he accumulated?C. D. Rom has just given an insurance company $35,000. In return, he will receive an annuity of $3,700 for 20 years.At what rate of return must the insurance company invest this $35,000 in order to make the annual payments? ...Post your question