How much more would you be willing to pay today for an investment offering $10,000 in four years rather than the normally advertised five-year period? Your discount rate is 8 percent.
A)$544.47
B)$681.48
C)$740.74
D)$800.00 PV =

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of $10,000 in four years at a discount rate of 8% is $7,318.52. The present value of $10,000 in five years at a discount rate of 8% is $6,774.05. The difference between these two values is $544.47.

How Much More Would You Be Willing to Pay Today