Cost of Capital^39
Solve this or use the present value table.
Using the present value interest factor table we find that present value of Rs 1 of 20
years from now at 5% interest is 0.3769. Multiplying it with the future value Rs 2,00,000
we get:
PV = 2,00,000 x 0.3769 = Rs 75,380Let us see how we use Microsoft Excel to do the same.
Step 1: Go to the Insert menu and choose function. In the financial function category
choose PV (it stands for Present Value) and press OK.
Step 3: You would get a seen that would look like this: