Discount Rate

• The present value of 500 received each year forever DC: 12%

  $500/0.12$
• 500 compounded for five years DC: 12%

  use PV table and divide
• The present value of 500 to be received each year for 5 years DC: 12%

  use cumulative table
• The present value of 500 received in five years time DC: 12%

  Use PV table and multiply
• The present value of 500 received each year forever DC: 12%


  4,167
• 500 compounded for five years DC: 12%

  882
• The present value of 500 received in five years time DC: 12%

  284
• The present value of 500 to be received each year for five years DC:12%

  1,804
• You expect to receive cash flows as follows: Year 1 33,000 investment return of 8% what is the value now?

  30,558