01-29-2009, 08:37 PM
Dear,
Where is link of your excel spread sheet?
You please try to discount 60 instalments of 5000 using the discount rate of 5% and then get the total of present values of all such discounted values. Don't forget that for each of year the discounting factor will be powered/geared up. Say if for first year discounting factor to be multiplied is 1/1.05 then for the second year it would 1/1.05 x 1/1.05 and for third year it would be 1/1.05 x 1/1.05 x 1/1.05 and so on.
Deduct the initial cash investment of 18000 from the gross total of the present values of 60 instalments.
You may get the answer. You can also get such present values of 60 instalments of 5000 each by using annuity formula/table for arrear instalments. Do you know such formula.
However, post here your own calculation so that we may comment.
Regards,
KAMRAN.
Where is link of your excel spread sheet?
You please try to discount 60 instalments of 5000 using the discount rate of 5% and then get the total of present values of all such discounted values. Don't forget that for each of year the discounting factor will be powered/geared up. Say if for first year discounting factor to be multiplied is 1/1.05 then for the second year it would 1/1.05 x 1/1.05 and for third year it would be 1/1.05 x 1/1.05 x 1/1.05 and so on.
Deduct the initial cash investment of 18000 from the gross total of the present values of 60 instalments.
You may get the answer. You can also get such present values of 60 instalments of 5000 each by using annuity formula/table for arrear instalments. Do you know such formula.
However, post here your own calculation so that we may comment.
Regards,
KAMRAN.
