A fund manager knows that she will have a liability of £2 million at the end of one year, £3 million at the end of two years, £5.4 million at the end of three years, and £5.8 million at the end of four years. Suppose that the fund manager wants to invest a sum of money that will satisfy this liability stream. Assuming that any amount that can be invested today can earn an annual interest rate of 7.6\% , how much must be invested today to satisfy this liability stream?
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A fund manager knows that she will have a liability of £2 million at the end of one year, £3 million...
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