Question

▼ Cash Flow Present Discounted Value Interest Rate is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. The present value of a loan in which ​$5000 is to be paid out a year from today with the interest rate equal to 4​% is ​$ nothing. ​(Round your response to the neareast two decimal​ place) If a loan is paid after two​ years, and the amount ​$9000 is to be paid then with a corresponding 1​% interest​ rate, the present value of the loan is ​$ nothing. ​(Round your response to the neareast two decimal​ place)

Answer 1

5000 in 1 year at 4% = $4,807.6923

9000 in 2 year at 1% =

Step-by-step explanation:

We will calculate the present value of the loan at maturity

`(Maturity)/((1 + rate)^(time) ) = PV`

Maturity 5000

time 1

rate 0.04

`(5000)/((1 + 0.04)^(1) ) = PV`

PV $4,807.6923

`(Maturity)/((1 + rate)^(time) ) = PV`

Maturity 9000

time 2

rate 0.01

`(9000)/((1 + 0.01)^(2) ) = PV`

PV $8,822.6644