Question regarding the different interest rates

Reference no: EM13770917

The time value of money is an important topic in finance. It essentially postulates that $1 today is worth more than $1 received tomorrow. Let's complete a few problems dealing with this concept:

1. How much would $1,000,000 due in 100 years be worth today if the discount rate was 5%? if the discount rate was 10%. Discuss how and why the results are different at the different interest rates.

2. If you wanted to have $1,000,000 in savings atretirement, how much would you need to save each year over the next 30 years if you could earn 5% annually on your savings?

Reference no: EM13770917

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