126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 Finance Concept: As the discount rate rises, the PV (Answer in words) The interest rate is called the discount rate when we compute PV. We can see this concept on the graph below. It has been created for you, but we need values. First we need data, so we'll make a table: Assume an annuity of $200 for 5 years at different rates (0% to 40%). Rates PV annuity POINTS (1) 0% 0 Inputs Given: 5% O Rate: Use column C starting at C136 10% ONper: 15% 0 Cash flows: 2.71 20% 0 25% 0 Formula: PV(rate, nper, pmt) 30% 0 Enter in cell D136: PV(C136,$G$138,$G$139) 35% 0Use Parenthesis! And the negative sign to get a positive number! 40% O Remember the dollar signs and the commas. After entering the formula in cell D136 copy to cells D137to D144. $1 $1 $1 PV of Annuity 8 8 855 $1 $0 PV of Annuties at Various interest Rates Chart 3 6 Interest Rates discount rate