please show work Given a 14 percent interest rate compute th

please show work

Given a 14 percent interest rate, compute the present value of deposits made in in the amount of $1,000 in year 1, $1,385 in year 2, $1,270 in year 3, and $1,450 in year 4.

Solution

Year Cash flow Discount factor Present Value a b c=1.14^-a d=b*c 1 $       1,000                   0.8772 $            877.19 2           1,385                   0.7695             1,065.71 3           1,270                   0.6750                 857.21 4           1,450                   0.5921                 858.52 Total             3,658.64 Thus, Present value of deposits $ 3,658.64