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Present Value

suppose your bank account will be worth $7000 in one year. The interest rate (discount rate) that the bank pays is 8%. What is the present value of your bank account today? What would the present value of the account be if the discount rate is only 3%

  • math - ,

    For the first part of your question,let X be the present value. Then solve
    1.08X = 7000
    for X

    For the second part, solve
    1.03X = 7000

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