FUND.OF CORP.FINANCE PKG. F/BU >C<
16th Edition
ISBN: 9781323165997
Author: Berk
Publisher: PEARSON C
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Chapter 3, Problem 14P
Summary Introduction
Future value refers to that value of an investment which will worth at a specified time in future. In simple words, expression of current investment in future dollars on basis of particular rate of interest is known as future value.
Present value is the current worth of a future value of money deposited at a rate of interest.
To determine:
- Calculate the future value of $200 in 1 year at an interest rate of 4% per year.
- Calculate the present value of $200 to be received after 1 year at an interest rate of 4% per year.
- To make choice, take $200 today or $200 in one year and reason behind that choice.
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Chapter 3 Solutions
FUND.OF CORP.FINANCE PKG. F/BU >C<
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