I can perform all high school calculations regarding present value/future value problems, however I have come across a problem of which I simply cannot seem to grasp the concept.
"Person A has to repay a loan in 7 yearly payments. Each payment consists of €1000. The first payment takes place at 31/12/2013 and the last at 31/12/2019. There is a compound interest of 5% per year.
Calculate the present value of the interest at:
I am sorry I cannot show any work, but I simply do not understand what exactly is meant by the question. I know that for compound interest I have to use the formula FV = PV(1+i)^n and that I have to calculate a summation of n terms when regarding n different payments, but if anyone could show me what I need to do here, I would be very thankful.
Thanks in advance,