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You receive $200 a month for 8 years beginning one month from today and an additional...

You receive $200 a month for 8 years beginning one month from today and an additional $6000 8 years from today.If the interest rate is 6% APR,what is the value today of this stream of cash flows?(round to the nearest dollar)
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Answer #1

Monthly interest rate, r = 6%/12 = 0.005

n = 8 * 12 = 96

The present value of monthly payments:

To this we will add the present value of single payment at year 8

PV = FV/(1 + r)^n

PV = 6,000/(1 + 0.06)^8

PV = 3,764.474228051

The value today = 15,219.043652 + 3,764.474228051

The value today = 18,983.517880051

The value today = $18,984

Can you please upvote? Thank you :-)

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