You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of $28,000, $32,000, $66,000, and $99,000 to you each year over the next four years, respectively. All payments will be made at the end of the year. If the appropriate interest rate is 3.6 percent, what is the value of the settlement offer today

$202,137.90  

Explanation:

Year Annual paymentDiscount factor  Present value  

1$28,000          0.965250965$27,027.03  

2$32,000          0.931709426         $29,814.70  

3$66,000          0.899333423         $59,356.01  

4$99,000          0.868082454$85,940.16

Total present value                                         $202,137.90  

The discount factor should be computed by  

= 1 ÷ (1 + interest rate)^years  

where,  

rate is 3.6%  

Year = 0,1,2,3,4 and so on  

answer; /// multipotentialite means a person who have many different interests and creative pursuits in life; (one true calling);

polymath; means a person   of wide-ranging knowledge or learning;

scanner; means; a device that captures images from photographic prints,posters,magazine pages.ect;

answer; rapid growth in buyer demand and high buyer switching cost;