Problem:
Present Values. Compute the present value of a $100 cash flow for the following combinations of discount rates and times:
r = 8 percent. t = 10 years.
r = 8 percent. t = 20 years.
r = 4 percent. t = 10 years.
r = 4 percent. t = 20 years
Future Values. Compute the future value of a $100 cash flow for the same combinations of rates and times a in problem 1
Calculating Interest Rate. Find the interest rate implied by the following combinations of present and future values:
Present Value Years Future Value
$400 11 $684
$183 4 $249
$300 7 $300