maths

posted by riya

Calculate the total present value today (to 2 decimal places) of the following cash flows:

\$300 due in 2 years from today
\$1,000 due in 5 years from today
\$200 due in 15 years from today
Use an interest rate of 12% per annum.

1. MathMate

i=0.12
use
P=F*(P/F,i,n)=F/((1+i)^n)

P1=-300/(1.12^3)=213.53
P2=-1000/(1.12^5)=567.43
P3=-200/(1.12^15)=36.54
(negative because money is due in the future)

P=P1+P2+P3 [present value]

2. MathMate

P1=-300/(1.12^3)=-213.53
P2=-1000/(1.12^5)=-567.43
P3=-200/(1.12^15)=-36.54
(negative because money is due in the future)

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