Present value: What is your personal discount rate or rate of preferences? ?

Question

Present value

What is your personal discount rate or rate of preferences? I.e. how much would you pay for a promise of $1000 to be received one year from now? Would you discount it by 10%, 5%, etc?

Answer 1

In this case about 5%, the going rate for a year, plus some extra to cover the risk of no payment.

Answer 2

It depends on the risk of receiving that amount.  If its comparable to a CD it would be discounted at a pretty low rate.  . If its comparable to stock then the rate would be higher.  And it would be different if it was comparable to an investment grade corporate bond, or a high yield bond.  You need something to compare it to to find a discount rate.