Morgan & Morgan are trying to finance their new office building. ABC Bank wants to present them a creative financing option. The loan is payable each year for 7 years. The payments are as follows:
What is the present value of all the future payments if you used an interest rate of 8%?
What would the value be of the loan was a variable rate and it changes to 10% in year 5?
The solution calculates Present Value of Future Payments.