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Time Value of Money

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Time Value of Money
Time Value of Money Danielle Kaplan B6022-P A01 Calculate the future value of 100,000 ten years from now based on the following annual interest rates 2 ( 100,000 x (1.02)10 121,899 5 ( 100,000 x (1.05)10 162,899 8 ( 100,000 x (1.08)10 215,892 10 ( 100,000 x (1.10)10 259,374 Calculate the present value of a stream of cash flows based on a discount rate of 8. Annual cash flow is as follows Year 1 100,000 ( 100,000 / (1.08) 92,592 Year 2 150,000 ( 150,000 / (1.08)2 128,600 Year 3 200,000 ( 200,000 / (1.08)3 158,766 Year 4 200,000 ( 200,000 / (1.08)4 147,006 Year 5 150,000 ( 150,000 / (1.08)5 102,088 Years 6-10 100,000 ( 100,000 / (1.08)6 N6 63,016 N7 58,349 N8 54,026 N9 50,024 N10 46,319 Calculate the present value of the cash flow stream in problem 2 with the following interest rates Year 1 8 ( 100,000 / (1.08) 92,592 Year 2 6 ( 150,000 / (1.06)2 133,499 Year 3 10 ( 200,000 / (1.1)3 150,262 Year 4 4 ( 200,000 / (1.04)4 170,960 Year 5 6 ( 150,000 / (1.06)5 112,088 Years 6-10 4 ( 100,000 / (1.08)6 N6 63,016 79,031 N7 58,349 75,991 N8 54,026 73,069 N9 50,024 70,258 N10 46,319 67,556 3HfC1cTP
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