Question

can anyone answer a finance question i have? it's not really mathy

Answer 1

ok

Answer 2

Steve just computed the present value of a $10,000 bonus he will receive in the future. The interest rate he used in this process is referred to as which one of the following?

Answer 3

the options are....

Answer 4

discount rate
simple rate
effective rate

Answer 5

im thinking its simple rate ?

Answer 6

current yield and compound rate were also options but they are incorrect

Answer 7

yes, simple is right. http://www.getobjects.com/Components/Finance/TVM/iy.html

Answer 8

ok sweet. can i bug for one more question and then i'll be done??

Answer 9

sure. fire away.

Answer 10

Your grandmother has promised to give you $5,000 when you graduate from college. She is expecting you to graduate two years from now. What happens to the present value of this gift if you delay your graduation by one year and graduate three years from now?
increases
decreases
remains constant
becomes negative
not enough info provided

Answer 11

the answer is not increases or remains constant so im thinking not enough info ??

Answer 12

ok, I am not sure, but i think that it might be decrease. reason being that during the time you delay graduation you are not gaining interest that you could be getting from the $5000.

" This sounds a bit confusing, but it really isn't. The basis is that receiving $1,000 now is worth more than $1,000 five years from now, because if you got the money now, you could invest it and receive an additional return over the five years."

Read more: http://www.investopedia.com/terms/p/presentvalue.asp#ixzz2KLYg8zbV

Answer 13

...ok. thanks!

Answer 14

yw.

Answer 15

the first questions answer was actually discount rate though..... whatevs