Interest rate or discounting rate impact decisions

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Reference no: EM131495685

1 - Long term, does even a small % difference in interest rate or discounting rate impact decisions or have a large impact on overall numbers

2 - Short term, let us say interest rate is 10%, we have 2 choices, someones has to pay 10,000 in 2 years, in Option A he is paying 1,000 in year 1 end and 9,000 in year 2 end - vs in Option is paying 9,000 in year 1 end and Rs 1,000 in year 2 end - it is short term - but is there large difference in present value of above 2 choices

3 - In 2 above, what happens if Option A is 4500 in year 1 end and 5500 in year 2 end, and Option B is vice versa 5500 in year 1 end and 4500 in year 2 end

4 - If 2 & 3 above how would your thinking change is interest rate is lowers say 3%

Please answer in excel sheet

Reference no: EM131495685

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