Calculating Present Value with Varying Deposits
Student Question: What is the present value of a $1,400 deposit at the end of year 1 and another $700 deposit at the end of year 5 if the interest rate is 8%?
Solving this problem requires us to determine the impact of varying deposits a different points in the maturity cycle of the financial instrument. We can do this in Microsoft excel
The key value in this spreadsheet is the present value. In this cell, you should use the NPV formula like so:
The final result is $1,914.52
- Student: Terrance Sheldrake
- Textbook: Principles of Finance
- Course: FIN/370