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1. Consider the following finite set of annual cash flows.
0 1 2 3 4 5 years
|--------------- |---------------- |---------------- |---------------- |----------------- |
$1500 $7500. $1200. $1200 - $4800
Assume a required rate of return (interest rate, discount rate) of 10% per year, compounded annually.
What is the total present value (PV) of this set of cash flows?
2. Consider the following set of finite set of quarterly cash flows.
0 1 2 3 4 5 years
|--------------- |---------------- |---------------- |---------------- |----------------- |
$1500 $1500. $2100. $1100 $2275
Assume a required rate of return (interest rate, compounding rate) of 9% per year, compounded quarterly.
What is the total present value (PV) of this set of cash flows?
3. Consider the following set of finite set of semi-annual cash flows.
0 1 2 3 4 5 years
|--------------- |---------------- |---------------- |---------------- |----------------- |
$221 $0 $175. - $100 $100
Assume a required rate of return (interest rate, compounding rate) of 4% per year, compounded semi-annually.
What is the total present value (PV) of this set of cash flows?
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