Week 3

Question 1

Net present value for a stream of payments

Answer 1

This is when you calculate the present value for the increase in money that you invested for multiple intervals in which the investment is compounded, measure the rate in return in percentage format for each investment and then use the function NPV(Rate of return for one interval, amount of money made for all intervals) and do this for each of the rates of return to get the net present value for each rate of return»how much that rate of return is worth in the present.