An investment will pay you $500 a year for 8 years, (i.e., 8 payments), starting 7 years from today. What is the present value of the investment at a discount rate of 8%? Show your work.
Year | Cash Flow | PVF at 8% | Present Value |
0 | 500.00 | 1.0000 | 500.00 |
1 | 500.00 | 0.9259 | 462.96 |
2 | 500.00 | 0.8573 | 428.67 |
3 | 500.00 | 0.7938 | 396.92 |
4 | 500.00 | 0.7350 | 367.51 |
5 | 500.00 | 0.6806 | 340.29 |
6 | 500.00 | 0.6302 | 315.08 |
7 | 500.00 | 0.5835 | 291.75 |
Present Value | 3,103.19 |
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