<PRE><B>Question 350094</B>
We&#39;ll assume you start from year 0.


The present value of 15 years worth of payments would be $6,810.864489.


This includes payments for years 3 and 5.


You need to subtract them.


The present value for a $1,000 payment in year 3 is equal to $711.7802478.


The present value for a $1,000 payment in year 5 is equal to $567.4268557.


Subtract both these payments from the present valueof $6,810.864489 and you have your answer.


The answer would be $5,531.657386


I used a financial calculator, but you&#39;ll get the same result by use of the present value of payments equation and the present value of a future value equation.


For the 15 years of payments, use the present value of payments equation.


For the present value of the missing payments, use the present value of a future value equation.


A cash flow analysis, using the same technique, would show the following result:


&lt;pre&gt;
year	payment         present value of payment
0		
1	$1,000.00	$892.86
2	$1,000.00	$797.19
3	$1,000.00	$711.78
4	$1,000.00	$635.52
5	$1,000.00	$567.43
6	$1,000.00	$506.63
7	$1,000.00	$452.35
8	$1,000.00	$403.88
9	$1,000.00	$360.61
10	$1,000.00	$321.97
11	$1,000.00	$287.48
12	$1,000.00	$256.68
13	$1,000.00	$229.17
14	$1,000.00	$204.62
15	$1,000.00	$182.70
sum of payments and present value of payments from year 1 through year 15 are shown below.	
	$15,000.00	$6,810.86
missing payments and present value of apyments that need to be subtracted are shown below.		
3	$1,000.00	$711.78
5	$1,000.00	$567.43
total minus missing payments and present value of missing payments is shown below.		
	$13,000.00	$5,531.66
&lt;/pre&gt;


the formulas you would use are shown below:


PRESENT VALUE OF A PAYMENT


{{{ PV(PMT) = (PMT * (1 - (1 / (1+i)^n))/i) }}}


PV = present value
PMT = payment per time period
i = interest rate per time period
n = number of time periods


PRESENT VALUE OF A FUTURE AMOUNT

{{{PV(FA) = FA / ((1+i)^n) }}}
PV = Present Value
FA = Future Amount
i = Interest Rate per Time Period
n = Number of Time Periods


Using these formulas, I was able to duplicate the answer.


You should be able to also.


Write if you have questions.


</PRE>