for Solutions Pro K5
blakli
for_solution_pro_5k.docxThe time value of money is an important topic in finance. It essentially postulates that $1 today is worth more than $1 received tomorrow. Let’s complete a few problems dealing with this concept:
1. How much would $1,000,000 due in 100 years be worth today if the discount rate was 5%? if the discount rate was 10%. Discuss how and why the results are different at the different interest rates.
2. If you wanted to have $1,000,000 in savings atretirement, how much would you need to save each year over the next 30 years if you could earn 5% annually on your savings?
