Mr. Art Deco will be paid $100,000 one year hence. This is a nominal flow, which he discounts at an 8% nominal discount rate:
PV = 100,000/1.08 = $92,593
The inflation rate is 4%.
Calculate the PV of Mr. Deco's payment using the equivalent real cash flow and real discount rate.© BrainMass Inc. brainmass.com September 24, 2018, 3:28 am ad1c9bdddf - https://brainmass.com/economics/inflation/real-cash-flows-pv-of-mr-art-deco-s-payment-513631