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Q5: For an annual benefit of $50,000, how many years does it take for this value to drop below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5% and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time (years, 1-50) on the x-axis.

Q5: For an annual benefit of $50,000, how many years does it take for this value to drop below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5% and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time (years, 1-50) on the x-axis.

Essentials Of Investments
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
Section: Chapter Questions
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Q5: For an annual benefit of $50,000, how many years does it take for this value to drop below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5% and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time (years, 1-50) on the x-axis.
Transcribed Image Text:Q5: For an annual benefit of $50,000, how many years does it take for this value to drop below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5% and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time (years, 1-50) on the x-axis.
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