Question

7.​Find the present value of $7,000 to be received one year from now assuming a 3 percent annual discount interest rate. Also calculate the present value if the $7,000 is received after two years.

Answer 1

a.	Present Value	=-pv(rate,nper,pmt,fv)
			= $ 6,796.12
	Where,
	rate	=	Discount rate	=	3%
	nper	=	Time	=	1
	pmt	=	Annual cash flow	=	0
	fv	=	Cash flow at the end of time	=	$       7,000
b.	Present Value	=-pv(rate,nper,pmt,fv)
			= $ 6,598.17
	Where,
	rate	=	Discount rate	=	3%
	nper	=	Time	=	2
	pmt	=	Annual cash flow	=	0
	fv	=	Cash flow at the end of time	=	$       7,000