Question:
Determine the combined present value as of December 31, 2013, of the following four payments to be
received at the end of each of the designated years, assuming an annual interest rate of 8%.
Answer:
PV of $1
Payment i=8% PV n
First payment: $5,000 x .92593 = $ 4,630 1
Second payment 6,000 x .85734 = 5,144 2
Third payment 8,000 x .73503 = 5,880 4
Fourth payment 9,000 x .63017 = 5,672 6
Total $21,326
Determine the combined present value as of December 31, 2013, of the following four payments to be
received at the end of each of the designated years, assuming an annual interest rate of 8%.
Answer:
PV of $1
Payment i=8% PV n
First payment: $5,000 x .92593 = $ 4,630 1
Second payment 6,000 x .85734 = 5,144 2
Third payment 8,000 x .73503 = 5,880 4
Fourth payment 9,000 x .63017 = 5,672 6
Total $21,326
