Compute the present value of a $100 cash flow for the following combinations of discount rates and times:
1. r = 8 percent. T = 10 years.
2. r = 8 percent. T = 20 years.
3. r = 4 percent. T = 10 years.
4. r = 4 percent. T = 20 years.


1) $671
2)$981.81
3)$811.09
4)$1,359.03

I don't understand how you come to this. Can you give me an example of the 1st one and see if I can get the rest.

Thanks,

The present value caluclations are as follow:

PV = FV [ 1 / 1 + I) n Present value calculation or you can use PV = FV x PVif ( present value of the interest factor)

Okay, I am feeling really stupid. Can I not calculate this by regular calculator?

PV = FV [ 1 / 1 + I) I don't see how you come up with 671.00 can you help? Please.