Question

need help with this. first question relates to graph.

1) You have won a court case that will pay you 100,000 over the following scheduled payouts: 11/1/18 10,000 12/1/18 10,000 3/1/19 10,000 5/15/19 5,000 7/1/19 5,000 1/1/20 20,000 1/1/21 20,000 3/26/24 20,000 You have found a wonderful investment opportunity and want to cash out now in order to take advantage. You have found an online company who will buy you out of this instrument using 7.5% discount rate. How much would they give you? Once you get this cash you immediately invest it in a 6 year CD that will be compounded monthly and has an annual interest rate of 4.75%. You will not contribute anything else to the initial value. How much will you have? What do you think of your actions? MacBook Air

Answer 1

Online company will give as follows-

Year	Amount receive in future	PV @7.5%	Present value
2018	20000	1 (assuming year start 2018)	20000
2019	20000	0.9302	18604.65
2020	20000	0.8653	17306.65
2021	20000	0.8049	16099.21
2024	20000	0.6479	12959.23
	TOTAL		84969.74

Amount receivable after 6 years = P(1+r/100)ⁿ

= 84969.74(1+4.75/1200)¹²

= 89094.84

Interest income= 89094.84-84969.74= 4125.10

Yes, i will go for the investment. since, interest of $4125.10 is receivale at the end of 6 year