Present Value Computation You receive $3,000 at the end of every year for 3 years. What is the present value of these receipts if you earn 8% compounded annually? Use Excel or a financial calculator for computation. Round your answer to nearest dollar. $Answer

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A: Present value = Amount*PV$1(n=3, i=8%)

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.