ModeldrillDiscount factors and present values
A financial modeling exercise from Modeldrill. Solve it with a live spreadsheet grid in your browser, with Fill right and Fill down, and it is checked the moment you submit.
The task
Fill the discount factor for each year (row 6: 1 divided by (1 + rate) to the power of the year), the present value of each cash flow (row 7) and the total present value in B8.
What this exercise teaches
Showing discount factors on their own row makes the math auditable: anyone can see that a dollar in year 5 is worth about 62 cents today at 10%.
A hint if you get stuck
=1/(1+$B$2)^B4 in B6. The year moves, the rate does not.
This exercise is part of Pro
Pro unlocks all 45 exercises, with worked solutions and progress saved to your account. The free exercises work without an account.
You create a free account first, so Pro is attached to it.
Monthly is charged today and then every month until you cancel, in one click from your account page. Lifetime is one payment with no renewals. Full refund within 14 days of paying.