We will calculate the future values for each of the cash flows separately and then add them up. Notice that we treat the withdrawals as negative cash flows:

This value includes a small rounding error.
To calculate the present value, we could discount each cash flow back to the present or we could discount back a single year at a time. However, because we already know that the future value in eight years is \($3,995.91,\) the easy way to get the PV is just to discount this amount back eight years:

We again ignore a small rounding error. For practice, you can verify that this is what you get if you discount each cash flow back separately.

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$1,000 x 1.078- = $1,000 x 1.7182 = $1,718.19 $2,000 x 1.07 = $2,000 x 1.5007 = 3,001.46 -$1,500 x 1.075 = -$1,500 x 1.4026 = - 2,103.83 $2,000 x 1.073 = $2,000 x -$1,000 x 1.07' = -$1,000 x Total future value 1.2250 = 1.0700 = 2,450.09 =- 1,070.00 = $3,995.91