Consider the following timeline detailing a stream of cash flows:
If the current market rate of interest is 8%,then the present value of this stream of cash flows is closest to:
A)$22,871
B)$21,211
C)$24,074
D)$26,000

Question

Consider the following timeline detailing a stream of cash flows: 
If the current market rate of interest is 8%,then the present value of this stream of cash flows is closest to:
A)$22,871 
B)$21,211 
C)$24,074 
D)$26,000

Quizplus · Accepted Answer

B)PV = 5000/(1.07)¹ + 6000/(1.07)² + 7000/(1.07)³ + 8000/(1.07)⁴ = $21,210.72

Consider the Following Timeline Detailing a Stream of Cash Flows