Time value of money problem (Equivalence Calculations) 4. Can you show the steps

Question

Time value of money problem (Equivalence Calculations) 4. Can you show the steps plz, Thnx.

Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8% compounded annually. In other words, how much do you have to deposit now (with the second deposit in the amount of $600 at the end of the first year) so that you will be able to withdraw $300 at the end of the second year through the fourth year, and $800 at the end of the fifth year, where the bank pays you 8% annual interest on your balance?

Explanation / Answer

Year Annualdeposit/withdrawal PV F @ 8% PV of deposit/withdrawal 0 1 600 0.92593 555.558 2 -300 0.85734 -257.202 3 -300 0.79383 -238.149 4 -300 0.73503 -220.509 5 -800 0.68058 -544.464 TOTAL -704.766 From the above calculations, Deposit in the 0 th year, ie. Now sholud be $ 704.766 or $ 705. Note: Calculations as per narration. Accompanying diagram shows different figures.

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