Question

An investment will pay you $500 a year for 8 years, (i.e., 8 payments), starting 7...

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.

Homework Answers

Answer #1
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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