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what is the pv in year 4? With interest rate 7%, calculate the PV of following cash flows. Year Payment PV 1,000 1,000 1,000 1,000 1,000 2 4
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Answer #1
CACLULATION OF THE PRESENT VALUE OF FOLLOWING CASH FLOW
Years Payment (A) PVF of $ 1 @ 7% (B) Present Value (A XB) Cumulative Value Of Present Value
                               1 $                 1,000                    0.9346 $               934.58 $               934.58
                               2 $                 1,000                    0.8734 $               873.44 $            1,808.02
                               3 $                 1,000                    0.8163 $               816.30 $            2,624.32
                               4 $                 1,000                    0.7629 $               762.90 $            3,387.21
                               5 $                 1,000                    0.7130 $               712.99 $            4,100.20
Total $           4,100.20
Answer = Present Value in Year 4 = $ 3,387.21
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