Answer:
Present value= $20,227.45
Explanation:
Giving the following information:
On Date 1, the cash flow is 5,000 dollars. On Date 2, the cash flow is 6,000 dollars. On Date 3, the cash flow is 7,000 dollars. On Date 4, the cash flow is 8,000 dollars. The current market rate of interest is 10%.
We need to use the following formula:
PV= FV/(1+i)^n
Date 1= 5,000/1.10= 4,545.46
Date 2= 6,000/1.10^2= 4,958.68
Date 3= 7,000/1.10^3= 5,259.20
Date 4= 8,000/1.10^4= 5,464.11
Total= $20,227.45
