# Present Values

S

#### stb.

After going around and around I have confused myself enough to ask for
help on this one.

What is the value today of 60 months of payments at \$580 per month?
The total of the payments is over \$34,000.

What is the value today of at change in interest rate from 5.99 to
6.125 on 697,000 for 120 months?

In each case I have assumed a discount rate equal to my new interest
rate of 6.125. I am not sure if that is correct to use or not, but in
any case using PV and NPV in excel I seem to be getting crazy answers,
like less than \$20k for the first one and about \$1500 for the second
one.

Any guidance here would be most appreciated.

stb.

B

After going around and around I have confused myself enough to ask for
help on this one.

What is the value today of 60 months of payments at \$580 per month?
The total of the payments is over \$34,000.

What is the value today of at change in interest rate from 5.99 to
6.125 on 697,000 for 120 months?

In each case I have assumed a discount rate equal to my new interest
rate of 6.125. I am not sure if that is correct to use or not, but in
any case using PV and NPV in excel I seem to be getting crazy answers,
like less than \$20k for the first one and about \$1500 for the second
one.

Any guidance here would be most appreciated.

stb.
For the first one @6.125 the present vale is \$29,910.82.

You have not furnished enoug information about the second amount to
calculate
the change.

I used a program called TValue5 to do the calculations.

..

S

#### sbrinks

The second question was the value today of an interest rate change. If
the interest rate on \$697,000 was increased from 5.99 to 6.125% per
annum over 60 months (5 years) what is the present value of the
increase in the payment?

Any help?

stb.

G

#### gmn9tt

The present value of \$697,000.00 over 120 months at 6.125% is:
\$384,459.98.
The present value of \$697,000.00 over 120 months at 5.990% is:
\$389,568.52.

The difference is \$5,108.54. I hope this is what you were asking and
that this helps.

Mike