manderson68191 manderson68191
  • 15-01-2020
  • Business
contestada

If the present value of $250 expected one year from today is $200, what is the one-year discount rate?

Respuesta :

andromache andromache
  • 15-01-2020

Answer:

25%

Explanation:

The computation of the one-year discount rate is shown below:

As we know that

1 + discount rate = (Present value) ÷ (expected value)

1 + discount rate = ($250) ÷ ($200)

1 + discount rate = 1.25

So, the discount rate would be

= 1.25 - 1

= 0.25 or 25%

Hence, we consider all the information which is given in the question

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