7. For total yearly payments of $5000 for 10 years, compare the compound amount accumulated at the end of 10 years if the payments are (a) end-of-year, (b) weekly, and (c) continuous. The effective (annual) interest is 20 percent and payments are uniform.

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.