You are offered an investment that will pay you $235 in one year, $450 the next year, and $600 at the end of the third year

Finance Nov 03, 2020

You are offered an investment that will pay you $235 in one year, $450 the next year, and $600 at the end of the third year. How much is this investment worth if the interest rate is 10%?

Expert Solution

Investment worth = future value/(1+i)^n

Investment worth = $235/(1.10) + $450/(1.10)^2 + $600/(1.10)^3

Investment worth = $1,036.326071

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