Homework SourseWhat is the present worth of a cash flow where you gain 20 f
What is the present worth of a cash flow where you gain $20 from time period 7 through time period 30 when the
interest rate is 5%?
Please show step by step solution with necessary excel or charts.
Solution
PV7= CF7 / (1 + i)7 where CF= 20 and i =5%
These calculations are carried out for the periods from 7 to 30.
| Period | Cashflow | Present Value |
| 7 | 20 | $14.21 |
| 8 | 20 | $13.54 |
| 9 | 20 | $12.89 |
| 10 | 20 | $12.28 |
| 11 | 20 | $11.69 |
| 12 | 20 | $11.14 |
| 13 | 20 | $10.61 |
| 14 | 20 | $10.10 |
| 15 | 20 | $9.62 |
| 16 | 20 | $9.16 |
| 17 | 20 | $8.73 |
| 18 | 20 | $8.31 |
| 19 | 20 | $7.91 |
| 20 | 20 | $7.54 |
| 21 | 20 | $7.18 |
| 22 | 20 | $6.84 |
| 23 | 20 | $6.51 |
| 24 | 20 | $6.20 |
| 25 | 20 | $5.91 |
| 26 | 20 | $5.62 |
| 27 | 20 | $5.36 |
| 28 | 20 | $5.10 |
| 29 | 20 | $4.86 |
| 30 | 20 | $4.63 |
| Total: | $205.94 |
