How to calculate present value?, Financial Management


Vishal Mehta & Co., Mumbai issued 7%, 5-year bond on 31st December 2006. The par value of a bond is Rs. 100. This bond pays interest annually and discount rate 6% should be used to calculate the present value of each cash flow. The bond is redeemed at par after five years. Find out the PV of the bond on 31st December 2006.


Calculation of PV of 7% Bond using Single Discounting Rate


Cash Flow (in Rs.)

PV (in Rs.)

















Present Value =


Posted Date: 9/10/2012 5:37:38 AM | Location : United States

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