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Investment X offers to pay you $1629 per year for 14 years, whereas Investment Y offers...

Investment X offers to pay you $1629 per year for 14 years, whereas Investment Y offers to pay you $7373 per year for 4 years. Both investments have a discount rate of 10.6%.

Calculate the present value for Investment X.

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Answer #1

Calculation of present value for investment X -

Year Discounting @ 10.6% installment PV
1 0.904159 1629 1472.875
2 0.817504 1629 1331.714
3 0.739153 1629 1204.081
4 0.668312 1629 1088.681
5 0.604261 1629 984.3407
6 0.546348 1629 890.0006
7 0.493985 1629 804.7022
8 0.446641 1629 727.5789
9 0.403835 1629 657.8471
10 0.365131 1629 594.7984
11 0.330137 1629 537.7924
12 0.298496 1629 486.2499
13 0.269888 1629 439.6473
14 0.244022 1629 397.5111
11617.82

present value of investment X would be = 11617.82

in case of any clarification required please comment.

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