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Calculating Present Value of single cash flow

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What is the present value of the following future amounts?

a.$800 to be received 10 years from now discounted back to the present at 10 percent

b.$300 to be received 5 years from now discounted back to the present at 5 percent

c.$1,000 to be received 8 years from now discounted back to the present at 3 percent

d.$1,000 to be received 8 years from now discounted back to the present at 20 percent

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Solution Summary

Solution describes the steps to calculate present value of a future cash flow with different combinations of discount rate, time period and future cash flow.

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Solution:
PV of any future cash flow can be determined by following formula

PV=FV/(1+i)^10
FV=future value
PV=Present Value
i=discount rate per period
n=number of ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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