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    • Avatar of MikeLittle says

      @princefury007, 13,161 is the present value total. 3,000 of that was paid straight away at a discount factor of 1. The remaining 10,161 represents the present value of 3,000 for each of 4 years multiplied by the cumulative discount factor. 10,161 / 3,000 = 3.387 so cumulative discount factor of 3.387 applied to the equal annual flows of 3,000 = 10,161.

      And 3.387 is the four year factor for 7%

      Clear?

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