Suppose your bank account will be worth $3,500.00 in one year. The interest rate (discount rate) that
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Suppose your bank account will be worth $3,500.00 in one year. The interest rate (discount rate) that the bank pays is 4%. What is the present value of your bank account today? What would the present value of the account be if the discount rate were only 3%?
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...
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