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Math Help - Help with Present Value of annuities

  1. #1
    Newbie
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    Jan 2010
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    Help with Present Value of annuities

    a) A project produces the following cash flow:
    Year Flow
    1 328
    2 470
    3 156
    If the discount rate is 10 percent, compounded annually, what is the
    project's present value?

    b) What is the present value of $ 25,000 to be received in 3 years if the interest rate is 12 percent, compounded bi-annually (twice a year)?
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  2. #2
    MHF Contributor
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    Dec 2007
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    Ottawa, Canada
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    a) 328/1.10^1 + 470/1.10^2 + 156/1.10^3

    b) 25000 / 1.06^6
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