Find the present value for the following:
- In 15 years you will be given $79,000
- Assume an inflation rate of 2.4%
Your tutorial is in excel, attached, and is now a template for similar problems. This uses the function keys in Excel to solve for PV. There is no instruction on using formulas or compute it by hand or tables to compute it by hand using table factors.
Present and future value of single sum, perpetuity, and present value of annuity
1. Present value of single sum problem
You are going to be given $100,000 in 12 years. Assuming an inflation rate of 3.5%, what is the present value of this amount?
2. Perpetuity problem
What is the value of a perpetuity with an annual payment of $100 and a discount rate of 6%?
3. Future value of single sum problem
You put $2,000 in an investment account today which will earn 8% over the next 14 years, what is the future value?
4. Present value of single sum problem
You are going to be given $45,000 in 7 years. Assuming an inflation rate of 2.5%, what is the present value of this amount?
5. Present value of annuity problem
You will receive $1,200 at the end of the next 15 years, assuming an 8% discount rate, what is the present value of the cash flows?View Full Posting Details