If you deposit $500 from year 1 to year 5, $300 from year 6 to year...

If you deposit $500 from year 1 to year 5, $300 from year 6 to year 20, no deposits year 21 and year 22, and $700 in year 22. If the discount rate is 5%, what is the present value? Please show all steps

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Expert Solution

We use the discounting technique to find the present value of the money to be received in future. Formula of PV is

PV= FV/ (1+ r)^n

where FV= future value

r= discounting rate

n= number of years for which discounting is done

PV can be calculated using two methods- one using the above formula and the other using the PV table from the internet.

jeff jeffy answered 1 year ago

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