finance?
November 21, 2008
Finance F asked:
If you are scheduled to receive a certain sum of money five years from now but wish to sell your contract for its present value, which type of compounding would you prefer to be used in the calculation? Why?
If you are scheduled to receive a certain sum of money five years from now but wish to sell your contract for its present value, which type of compounding would you prefer to be used in the calculation? Why?
November 22nd, 2008 at 9:15 pm
The less compounding (the least amount of compounding), the higher will be the present value of the contract, which is what you want because when you sell, you will get more money.