| Chapter 4 Question 3 |
| Compute the present value of $100 at an 4 percent interest rate for the following: |
| | (a.) | 5 years from now. |
| | (b.) | 10 years from now. |
| | (a.) | Interest rate (RATE) | 4% |
| | | Number of periods (NPER) | 5 |
| | | Payment (PMT) | $ - 0 | | Payment is zero because this problem does not involve an annual payment, just a one-time, lump-sum payment. |
| | | Future value (FV) | $ (100.00) | | Excel wants a negative number here to show that this is cash outflow for you at the beginning for this investment. |
| | | PRESENT VALUE (PV) | $82.19 |
| | (b.) | Interest rate (RATE) |
| | | Number of periods (NPER) |
| | | Payment (PMT) | $ - 0 |
| | | Future value (FV) |
| | | PRESENT VALUE (PV) | $0.00 |
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Chapter4Question3.xlsx
