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What is the present value of 500,000 fifteen years from now at a 4% interest rate...

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Economics

What is the present value of 500,000 fifteen years from now at a4% interest rate with exponential discounting? With hyperbolicdiscounting? When would you choose to use hyperbolic discountinginstead of exponential discounting?

Answer & Explanation Solved by verified expert
4.5 Ratings (804 Votes)
N 15 years R 4 A 500000 Exponential Discounting PV A eRN PV 500000 e415100 PV 274405818 Hyberbolic Discounting PV A 11RN PV 5000001415100 PV 312500 Hyperbolic discounting is when people    See Answer
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