Answer:
$ 3,085
Explanation:
Given that;
The present value(PV) ------ ???
Future payment (F) ---- $5,000
The annual effective rate are 4%, 5% and 5.5% respectively, which can be illustrated as;
r = 0.04, 0.05 and 0.055 respectively.
The present value formula is given as:
[tex]PV=\frac{F}{(1+r)^n}[/tex]
[tex]PV=\frac{5000}{(1+0.04)^3(1+0.05)^2(1+0.055)^5}[/tex]
PV = 5000 × (1.04)⁻³(1.05)⁻²(1.055)⁻⁵
= $ 3,084.814759
≅ $ 3,085
