ANNUITY Present Value Inputs Payments Discount rate per period Number of periods s80 6% 5 I I Present Value - Annuity I Hint: * The value is the yellow cell should equal the amount in cell E28! Think about why this is the case. $1 $1 $1 $1 $1 $1 So so so So so 2% 82% 10% Discount rate Annuity Present Value using a Time Line I Calculate the Pv of the individual cash flow Period Cash Flows Present Value of Each Cash Flow Present Value $80.00 $80.00 $80.00 $80.00 $80.00 $0.00 using Eqn 8.1a, where FV is the cash flow in Row 22, k = 6%, and n = the time is Row 21 The value in the yellow cell will calculate on its own . 2% 4% 6% 8% 10% 12% Annuity Present Value using the PV Function Present Value Calculate the PV of the payment using the Excel PV function, where FV-$80, k= 6%, and n = 5