Question

what is the present value of $500 recieved at the end of each year for 15 years? ( assume thatt the first patyment is recieved a year from today. Use a discount rate of 10%, and round your answer to the nearest $10.) g

Answer 1

Answer:

$3800

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow fromyear 1 to 15 = 500

I = 10%

PV = 3800

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.