Answer:
$449,830
Explanation:
A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.
Don draper will receive total 7 payments in 6 years time.
Formula for Present value of annuity is as follow
PV of annuity = P + P x [ ( 1- ( 1+ r )^-n ) / r ]
P = Payment = $80,000
r = rate of return = 8%
n = number of years = 6 years
PV of annuity = $80,000 + $80,000 x [ ( 1 - ( 1+ 8% )^-6 ) / 8% ]
PV of annuity = $80,000 + $369,830
PV of annuity = $449,830
