Present value of Money

  1. Discuss the concept of present value of money.
  2. How time value of money concept is used while making financial decisions.
  3. Julie wants to know how large of a deposit to make so that the money will grow to $10,000 in 5 years at a discount rate of 10%.
  4.  Suppose you are trying to find the present value of two different cash flows.  One is $100 two periods from now, the other a $100 flow three periods from now.  Which of the following is/are true about the discount factors used to value the cash flows? Explain.