pmoore
Feb 22, 2009, 02:04 PM
How to find NPV and PI for an annuity that pays $500 per year for 8 years and cost $2,500. Assue a discount rate of 6%.
berlinevi
Feb 23, 2009, 10:13 AM
cost = -2500
year cash flow 6%factor PV
1 500 0.943 4715
2 500 1.833 9165
3 500 2.673 13365
4 500 3.465 17325
5 500 4.212 21060
6 500 4.917 24585
7 500 5.582 27910
8 500 6.210 31050
149175
149175-2500=146,675 =NVP