Question

What is the present value of $1,200 per year, at a discount rate of 8 percent, if the first payment is received 9 years from now and the last payment is received 28 years from now?

Answer 1

		8.00%
Year	Cash Flow	PV factor = 1/ (1+r)^t	PV
0	$                                    -	1.000	$              -
1	$                                    -	0.926	$              -
2	$                                    -	0.857	$              -
3	$                                    -	0.794	$              -
4	$                                    -	0.735	$              -
5	$                                    -	0.681	$              -
6	$                                    -	0.630	$              -
7	$                                    -	0.583	$              -
8	$                                    -	0.540	$              -
9	$                        1,200.00	0.500	$     600.30
10	$                        1,200.00	0.463	$     555.83
11	$                        1,200.00	0.429	$     514.66
12	$                        1,200.00	0.397	$     476.54
13	$                        1,200.00	0.368	$     441.24
14	$                        1,200.00	0.340	$     408.55
15	$                        1,200.00	0.315	$     378.29
16	$                        1,200.00	0.292	$     350.27
17	$                        1,200.00	0.270	$     324.32
18	$                        1,200.00	0.250	$     300.30
19	$                        1,200.00	0.232	$     278.05
20	$                        1,200.00	0.215	$     257.46
21	$                        1,200.00	0.199	$     238.39
22	$                        1,200.00	0.184	$     220.73
23	$                        1,200.00	0.170	$     204.38
24	$                        1,200.00	0.158	$     189.24
25	$                        1,200.00	0.146	$     175.22
26	$                        1,200.00	0.135	$     162.24
27	$                        1,200.00	0.125	$     150.22
28	$                        1,200.00	0.116	$     139.10
		NPV	$ 6,365.33