What is the present value of the following cash flow stream at a rate of 6.25%?

A)$411.57
B)$433.23
C)$456.03
D)$480.03
E)$505.30

Question

What is the present value of the following cash flow stream at a rate of 6.25%? ​
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 ​​
A)$411.57 
B)$433.23 
C)$456.03 
D)$480.03 
E)$505.30

Quizplus · Accepted Answer

The present value of the cash flow stream can be found by discounting each cash flow to its present value and then adding up the present values. Using a financial calculator or spreadsheet, we can find that the present value of the cash flow stream is $505.30. Therefore, the best choice is (E).

What Is the Present Value of the Following Cash Flow