Now explain this meaning of G(s, 1 Forts, G(s, t) is the value at time t that will grow to equal 1 at time s. When t = = 0, G(s, 0) is the "present value" of a promise to pay $1 at time s. If the interest rate is a = 0.1 10% per year, what is the present value G(s, 0) of million dollar inheritance promised in s = 10 years?
Now explain this meaning of G(s, 1 Forts, G(s, t) is the value at time t that will grow to equal 1 at time s. When t = = 0, G(s, 0) is the "present value" of a promise to pay $1 at time s. If the interest rate is a = 0.1 10% per year, what is the present value G(s, 0) of million dollar inheritance promised in s = 10 years?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Now explain this meaning of G(s, t) when t is less than s. We go backwards in
For t<s, G(s, t) is the value at time t that will grow to equal 1 at time s.
When t = 0, G(s, 0) is the "present value" of a promise to pay $1 at time s. If
the interest rate is a = 0.1 = 10% per year, what is the present value G(s, 0) of
10 years ?
a million dollar inheritance promised in s =
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