Calculate the N.P.V

May 2010
1
0
hi, how are u guys

don`t really know how to bit that
checked some posts before, but still nothing
can someone take a look pls

An investment costing 50 000 will generate year end returns of 7000 for 10 years. Calculate the N.P.V using a discount rate of 4 % per annum.
 
Aug 2007
3,171
860
USA
An investment costing 50 000 will generate year end returns of 7000 for 10 years. Calculate the N.P.V using a discount rate of 4 % per annum.
Please learn to use "Basic Principles". I beg you.

If \(\displaystyle i = 0.04\), then \(\displaystyle v = 1/(1+i) = 1/1.04\)

\(\displaystyle N.P.V. = -50000 + 7000(v + v^{2} + v^{3} + ... + v^{10}) = -50000 + 7000\left(\frac{v - v^{11}}{1-v}\right)\)

You can simplify that a little more if you like.