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The problem asks to calculate the present value of future cash flows, considering two different discount rates:

- $100 received at the end of the 1st year,
- $500 received at the end of the 2nd year,
- $1,000 received at the end of the 3rd year.

We need to calculate the total present value for two different discount rates:
1. $ 4\% $
2. $ 25\% $

The formula for the present value (PV) of a cash flow is:

\[
PV = \frac{C}{(1 + r)^t}
\]

Where:
- $ C $ is the cash flow at time $ t $,
- $ r $ is the discount rate,
- $ t $ is the time period (in years).

### Step 1: Present Value with 4% Discount Rate
We'll compute the PV for each cash flow separately and sum them up.

### Step 2: Present Value with 25% Discount Rate
Similarly, we'll repeat the calculations with a 25% discount rate.

Let me compute the present values for both rates.The total present value of the cash flows is:

1. With a 4% discount rate: **$1,447.43**
2. With a 25% discount rate: **$912.00**

Would you like further details on how these values were computed or have any questions?

Here are five related questions you might find useful:
1. How is the present value calculation affected by increasing the discount rate?
2. What is the meaning of the discount rate in financial terms?
3. How would the total present value change if there were additional cash flows?
4. What is the future value, and how does it differ from the present value?
5. How do different discount rates reflect risk in investment decisions?

**Tip**: The higher the discount rate, the lower the present value of future cash flows, reflecting greater uncertainty or risk.

$100 diterima pada akhir tahun pertama, $500 pada akhir tahun ke-2, dan $1,000 pada akhir tahun ke-3. Berapakah total nilai sekarang dari penerimaan tersebut dengan tingkat diskonto sebesar (i) 4 persen? (ii) 25 persen?

Calculate the present value of future cash flows of $100, $500, and $1,000 received over three years with 4% and 25% discount rates. Learn how the time value of money and discount rates affect financial decisions.

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