# End-of-year cash flow

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P3-15. For the following questions, assume an end-of-year cash flow of $250 and a 10 percent discount rate.

a. What is the present value of a single cash flow?

b. What is the present value of a 5-year annuity?

c. What is the present value of a 10-year annuity?

d. What is the present value of a 100-year annuity?

e. What is the present value of a $250 perpetuity?

f. Do you detect a relationship between the number of periods of an annuity and its

resemblance to a perpetuity?

https://brainmass.com/business/annuity/end-year-cash-flow-168780

#### Solution Preview

Please see the attached file.

a. PV = $250 Ã— (1.10)-1 = $227.27

b. PV = $250 Ã— [ 1- (1.10)-5 ] = $947.70

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#### Solution Summary

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$2.49