In trying to calculate the below question using a present
value table, the younger the bond is, the lower my answer is, and that
just doesn't make sense to me. They don't all have to be answered, but
if one or two were answered with a description of the process so that I
can understand how to do the others I would be incredibly greatful!
When
they are first born, Grandma gives each of her grandchildren a $2,500
savings bond that matures in eighteen years. For each of the following
grandchildren, what is the present value of each savings bond if the
current discount rate is 4%?
a) Seth turned 16 years old today:
b) Shawn turned 13 years old today:
c) Sherry turned nine years old today
d) Sheila turned four years old today
e) Shane was just born
No comments:
Post a Comment