(a) Money today equals money in year six.
Money will be $200 in 16 years, or after 10 years.
n= 10
Interest rate (i) = 4% or 0.04
Present value = future value/(1+i)^n
200/(1+0.04)^10
135.1128338
So $135.11 in year 6 is equivalent to $200 in year 16.
(B) present value = $5
n = 201
Future value = present value*(1+i)^n
5*(1+0.04)^201
13263.8989
So $5 today is equivalent to $13263.90 in year 201.
(C)Future value = 1000000
n = 1000
Present value = 1000000/(1+0.04)^1000
= 0.000000000001
It is fraction of 0 amount that is equal to $1000000 in year 1000
<h3>
What is the interest rate ?</h3>
Lenders charge borrowers interest in the form of a percentage of the principal, or the loaned sum. The interest rate on a loan is often indicated on an annual basis known as the annual percentage rate (APR) (APR).
A savings account or certificate of deposit earnings at a bank or credit union may also be subject to an interest rate (CD). Annual percentage yield (APY) refers to the interest earned on these deposit accounts.
The borrower is essentially charged interest for the use of the asset. Cash, merchandise, automobiles, and real estate are all examples of lent assets. Since higher interest rates make borrowing the same amount of money more expensive, they can be seen as the "cost of money."
To learn more about the, interest rate visit:
brainly.com/question/14556630
#SPJ4