PV factor = 1/(1+r)^n
here,
r= 8%=>0.08.
n=1,2,3.
year | cash flow | PV factor | cash flow *PV factor |
1 | 60 | 1/(1.08)^1=>0.92593 | 55.5558 |
2 | 60 | 1/(1.08)^2=>0.85734 | 51.4404 |
3 | (1000+60)=>1060 | 1/(1.08)^3=>0.79383 | 841.4598 |
maximum amount to be lent = | $948.46 |
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