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NPV- If i were to recieve $2500 benefit 3 years from now- what is its current present value using an interest?
NPV- If i were to recieve $2500 benefit 3 years from now- what is its current present value using an interest rate of 5%?
Please help can't figure it out
2 Answers
- Anonymous1 decade agoFavorite Answer
This is a present value question.
PV= FV/(1+i)^n
PV= 2500/(1+.05)^3
PV=$2,159.59
This is a very very basic question.
- 1 decade ago
Depends on your investment return. If you could earn only 3%, it would be worth, $2,287.85. In contrast if you could get 12%, it would be worth $1,779.45.
3% $2,287.85
12% $1,779.45
Lets assume you achieve an 8% rate of return (which is a realistic average for a portfolio with 70-80% stocks), your $2,500 in three years is worth $1,984.58.
8% $1,984.58
