PV of $1 PV of Annuity of $1
6% 8% 10% 6% 8% 10%
1 0.9434 0.9259 0.9091 1 0.9434 0.9259 0.9091
2 0.8900 0.8573 0.8264 2 1.8334 1.7833 1.7355
3 0.8396 0.7938 0.7513 3 2.6730 2.5771 2.4869
4 0.7921 0.7350 0.6830 4 3.4651 3.3121 3.1699
5 0.7473 0.6806 0.6209 5 4.2124 3.9927 3.7908
1 Choose one column in the PV of $1 table; using your calculator, derive each
PV factor using the formula.
2 Can you use the PV of $1 to derive the PV of Annuity of $1 for the same interest
rate? (YES)
3 What is the present value of $1,000 to be received at the end of...
a.  1 year, discounted at 6%?
b.  2 years, discounted at 6%?
c.  3 years, discounted at 6%?
d. PROVE your answers in a, b, and c.
4 What is the present value of an annuity of $1,000 to be received
a. at the end of 1 year, discounted at 6%?
b. at the end of years 1 and 2, discounted at 6%?
c. at the end of years 1, 2, and 3, discounted at 6%?
d. PROVE your answers in items a, b, and c.
5 For question 3c above, write the problem as a FUTURE VALUE problem.
6 For question 4c, write the problem as a FUTURE VALUE problem.