Answer:
Present value of the cashflow discounted at 5% per year 76,815.65
Explanation:
First, we calculate the present value of the 4 years 15,000 dollar annuity:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 15,000.00
time 4
rate 0.05
[tex]15000 \times \frac{1-(1+0.05)^{-4} }{0.05} = PV\\[/tex]
PV $53,189.2576
Now, we discount two more year as lump sum as this is two year after the invesmtent:
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 53,189.26
time 2.00
rate 0.05000
[tex]\frac{53189.2575624354}{(1 + 0.05)^{2} } = PV[/tex]
PV 48,244.2245
Finally we also discount the 30,000 by one year
30,000 / 1.05 = 28571.43
We add up both to get the present value:
48,244.22 + 28,571.43 = 76,815.65
