Your friend says that if you give him $100 a year for the next 5 years (at end of year 1, end of year 2, etc), he will give you back the $500 at the end of year 7

Economics Dec 28, 2021

Your friend says that if you give him $100 a year for the next 5 years (at end of year 1, end of year 2, etc), he will give you back the $500 at the end of year 7. If you were to agree to this, how much money would you lose in today's dollars if the alternative was a bank account with an interest rate of 5%?