Question

You are in talks to settle a potential lawsuit. The defendant has offered to make annual...

You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of \$29,000,\$33,000,\$68,000, , and $102,000 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 5.1 percent what is the value of the settlement offer today?
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Answer #1

Given,

Year 1 cash flow (CF1) = $29000

Year 2 cash flow (CF2) = $33000

Year 3 cash flow (CF3) = $68000

Year 4 cash flow (CF4) = $102000

Interest rate (r) = 5.1% or 0.051

Solution :-

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