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

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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 × (1/1.10) or divide by 1.10 (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 (1/1.10).

c. What is the value of your investment today? Multiply your answer to part b by (1/1.10).

d. Use the formula to find the present value of $6,800 received three years from now at 10 percent interest.

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Foundations Of Financial Management

ISBN: 9781260013917

17th Edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

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Question Posted: Jun 03, 2022 10:33 PM

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

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0 b 1 IN 2 $6,800 3

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Foundations Of Financial Management

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