Question

The present value of 1,000 receivable after one year at 8% p.a. is 926. If it is discounted half-yearly instead of yearly, the present value would be:​

Answer 1

Answer:

If the appropriate interest rate is 10 percent, then the present value of $100 spent or earned one year from now is $100 divided by 1.10, which is about $91. This simple example illustrates the general truth that the present value of a future amount is less than that actual future amount.

Answer 2

Answer:

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