Calculate the present values of the following cash flows (a) $1,000 to be received every year, starting one year from now, for 25 years at a discount rate of 8 (b) $2,500 to be received every year, starting one year from now, for 15 years at a discount of 7 ...

Using Equation56 Present value amountPresent ...

Calculate the present values of the following cash flows: (a) $1,000 to be received every year, starting

Question:

Calculate the present values of the following cash flows:
(a) $1,000 to be received every year, starting one year from now, for 25 years at a of 8%
(b) $2,500 to be received every year, starting one year from now, for 15 years at a discount of 7%.
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...