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anonymous

  • one year ago

Finding present values. Am I doing this right? 1. Use an annual interest rate of 10.5% to calculate the present value of an income stream of $1,000 received at the end of each year for the next ten years. (We're not using calculus with this.) My solution is to use PV = 1000/(1+10.5%)^t, where t = the year in question. 2. Use an annual interest rate of 18% (compounded monthly) to calculate the present value of $100 received at the end of each month for the next 120 months. My solution is to use PV = 100/(1+18%/12)^t, where t = the month in question. Are these correct?

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