You expect to have $12,000 in one year. A bank is offering loans at 5.5% interest per year. How much can you borrow today? Today you can borrow $ (Round to the nearest cent.)
You expect to have $12,000 in one year. A bank is offering loans at 5.5% interest per year. How much can you borrow today? Today you can borrow $ (Round to the nearest cent.)
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
Problem 1PS
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You expect to have $12,000 in one year. A bank is offering loans at 5.5% interest per year. How much can you borrow today?
Today you can borrow $
(Round to the nearest cent.)
C
Expert Solution
Concept
In this question we have to calculate present value of $ 12,000 in one year at 5.5% interest rate. Present value is the present worth of a future amount which is calculated by discounting the future amount at an appropriate discount rate.
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