Present value of money to be paid or received in the future

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Reference no: EM131459064

1) Ten years after graduating from Pace, you decide to save $5,000 a year. If you do this for 35 years and reinvest all the earnings, how much will you save:

a. If you earn 4%/year, or

b. If you earn 8%/year?

2) In 2 or 3 words, why is the FV at 8% not 2x the FV at 4%?

3) When calculating the present value of money to be paid or received in the future, what are the 2 considerations in determining r?

Reference no: EM131459064

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