Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Question:

Expert-verified
Foundations Of Financial Management
Found in: Page 282
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

You will receive $6,800 three years from now. The discount rate is 10 percent. a. What is the value of your investment two years from now? Multiply $6,800 3 (1/1.10) or divide by 1.10 (one year’s discount rate at 10 percent).

Answer

The value of investment after two years is $6,181.82.

See the step by step solution

Step by Step Solution

Step 1: Identification of the required information

Future value (FV) = $6,800

Interest Rate (i) = 10%

Discount factor = 1.10

Step 2: Value of investment two years from now (PV2)

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.