Question

M-10 Explain the factors in the present value of a single sum table.

Answer 1

* Calculating the present value of a Single sum let's take an example, you are to receive $1000 at the end of 2 years. What is the presseal value of $1000 today. Rate of interest = 8.1. PV=? year, year 2 $1000 FV formula is lition na namber of Fr= future value, i = rate of interest - periods $1000 = $857.33 (1+0.08 ja - * In a single sum present value table the horizontal line will show you the rate of interest and vertical line will show you number of periods.

no 15. 2.. 34, 44.54 0.990 0.980. 0.971 0462 0.952 to 0.980 0.961 0.943 10-925 10.907 w 0.971 0.961 0.942 0.915 0.889 0.864 0.924 0.888 0.855 0.623 6.906 0.863 0.622 0.484 Cos 0.951 what is the Pv factor for n=2 and ✓ = 4.1 a PVF = 0.925