Question

And investment will pay $100 at the end of each of the next three years, $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If other investments of equal risk or an 8% annually, what is its present value.

Answer 1

Year	Cash flow	PV Factor @ 8%	PV
1	$         100	0.9259	$     92.59
2	$         100	0.8573	$     85.73
3	$         100	0.7938	$     79.38
4	$         200	0.7350	$   147.01
5	$         300	0.6806	$   204.17
6	$         500	0.6302	$   315.08
		Present Value	$   923.98

present value=$923.98