Question

If the present value of $400 paid one year from now is $320, what is the one-year interest rate? (Note: this number is also known as the discount rate.)?​

Answer 1

Answer:

The quantity to be ordered at one time is known as ‘ordering quantity’ and should be determined with good care. If it is small, a number of orders will have to be placed in a year involving costs in terms of clerical labour, material handling, etc. Also there will be loss in terms of price and transport costs. Large orders avoid these losses and will lead to economy in transport costs and price concessions.

Answer 2

Explanation:

If the present value of $400 paid one year from now is $320, what is the one-year interest rate? (Note: this number is also known as the discount rate.)?