Materials from Class - 2021-9 > Mon 11/8

Daily exercise on PV formulas 1-2

Please sketch the cash flow for each stream of payments below. Then compute its present value as of year 0. Round each answer to the nearest dollar.

  1. A single payment of $1000 in period 2 using an interest rate of 10%.
  2. The stream of payments below using an interest rate of 5%:

    Period Payment
    1 -100
    2 -100
    3 500
  3. The stream of payments below using an interest rate of 15% (note the large gaps between payments):

    Period Payment
    0
    -1000
    10
    2000
    20
    2000

Please scan and upload your answer.

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Revised 11/08/2021