[vsbratcher]

I have to compute the present value of a $100 cash flow for the following combinations of discount rates and times:

a) r = 8 percent. T = 10 years. $ 671
b) r = 8 percent. T = 20 years. $ 981.81
c) r = 4 percent. T = 10 years. $ 811.09
d) r = 4 percent. T = 20 years. $1,359.03

Fortunately, I found the answers that you see -- can someone explain the process to finding those answers?

[CaptainForest]

a) r = 8 percent. T = 10 years. $ 671

Present Value of an Annuity:

PVoa = PMT [(1 - (1 / (1 + I)^n)) / I]
PVoa =100*[(1-(1/(1+0.08)^10))/0.08]
PVoa = 671

PMT = Payment, in this case, $100
n = times, in this case, 10 years
I = interest rate per period, in this case, 8%

Try using the formula for the others, and you should get your answers.

[vsbratcher]

Thank you