Use the Present Value of $1 table to determine the present value of $1 What is the total present value of the cash flows received received one year from now?

Assume a 6% interest rate.

 

Present Value of Annuity of $1 Periods Period 2 1.970 Period 3 2.941 Period 4 3.902 Period 5 Period 6 4.853 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 1.942 1.913 1.886 1.859 2.884 2.829 2.775 2.723 3.808 3.717 3.630 3.546 3.465 4.713 4.580 4.452 4.329 4.212 16% 18% 20% 0.877 0.862 0.847 0.833 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 3.312 3.170 3.037 2.914 2.798 2.690 2.589 3.993 3.791 3.605 3.433 3.274 3.127 2.991 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 6.002 6.142 Period 11 10.368 9.787 9.253 8.760 Period 12 11.255 10.575 9.954 9.385 8.863 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 8.055 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 8.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 5.342 4.910 4.533 5.468 5.008 4.611 5.575 5.092 4.675 6.623 5.929 5.353 4.870 6.873 6.097 5.467 4.948 7.003 6.177 5.517 4.979 7.105 6.233 5.548 4.997