8. What is the present value of $100,0 00 received in 30 days if the discount rate is 3.0% annually? (Use simple interest formula) 9. What is the future value of $50,000 earning 2.25% annually for 90 days? (Use simple interest formula)1

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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8. What is the present value of $100,0 00 received in 30 days if the discount rate is 3.0% annually? (Use simple interest formula)

9. What is the future value of $50,000 earning 2.25% annually for 90 days? (Use simple interest formula)1

 

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Simple interest is the amount paid on a principal part of a loan. Here the borrower does not pay interest on the accrued interest component. 

Simple interest = Principal * interest rate* period. 

Future value = Principal *(1+(period* rate))

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