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# calculate the following discounted cash flow problems

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Please calculate the following discounted cash flow problems

a. The future value of \$1,250 received today and invested at 6 percent for 10 years

b. The future value of an annuity of \$275 invested each of the next 5 years at 4 percent.

c. The present value of the following cash stream: year 1: 200, year 2: 200, year 3 200, discounted at 12 percent.

d. The present value of a 500 dollar cash payment expected to be received 16 years from now, discounted at 8 percent.

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#### Solution Preview

a. The future value of \$1,250 received today and invested at 6 percent for 10 years

FV = 1250
Rate I/Y = 6%
N = 10
By a financial calculator, or use the formula we can compute:
PV = FV / (1+r)^n = 1250/(1+6%)^10 = \$698

b. The future value ...

#### Solution Summary

Computations done by hand using formula are examined.

\$2.19