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You are promised to receive $800 today, $2,000 each in Year 1 and 6. The interest rate is 5%. 1) ( What is the worth
You are promised to receive $800 today, $2,000 each in Year 1 and 6. The interest rate is 5%.
- 1) (What is the worth of this promise today (present value)? Use the NPV function to answer the question.
- 2) What is the worth of this promise in Year 8? Use the FV formula (not the FV function) to answer this question (Hint: compute the FV of each cash flow at the end of Year 8 and sum them up).
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