I'm not sure how can the following formula be derived. Please explain step by step with reasons:
Present value of constant cashflow at fixed rate:
Future value of constant cashflow at fixed rate:
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sister post to https://quant.stackexchange.com/questions/75837/how-to-derive-the-formula-for-present-values-and-future-values-of-constant-cash which is forcibly closed. – Student Jun 11 '23 at 15:35
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The one cash flow at year $k$ has a present value of $C_t (1+i)^{-k}$. Adding the present values of $t$ upcoming cash flows would be a sum of geometric sequence. – peterwhy Jun 11 '23 at 15:58
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@peterwhy, sorry, it still doesn't seem very obvious to me. Would you mind deriving it in full as the solution below? Thank you very much. – Student Jun 12 '23 at 02:54