What is the minimum amount which a person should be ready to accept today from a debtor who otherwise has to pay a sum of Rs 4000 today and Rs 5000, Rs 7000, Rs 8000 and Rs 10,000 at the end of year 1 through 4. The rate of interest may be taken at 14%.
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The payments are Rs 4000 today, and Rs 5000, Rs 7000, Rs 8000, and Rs 10,000 at the end of each year from year 1 through year 4. The interest rate is given as 14%. We need to find out the minimum amount that a person should be willing to accept today instead of Show more…
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