Answer:
(1) If discount rate is 7%, present value of $1,400 paid in three years is $3,674.04
(2) If discount rate is 8%, present value of $1,400 paid in three years is $3,607.94
(3)If discount rate is 9%, present value of $1,400 paid in three years is $3,543.81
Explanation:
We can use excel or manually calculate as below:
(1) Discount rate is 7%:
= $1400/(1+7%)^3+$1400/(1+7%)^2+$1400/(1+7%) = $3,674.04
(2) Discount rate is 8%:
= $1400/(1+8%)^3+$1400/(1+8%)^2+$1400/(1+8%) = $3,607.94
(3) Discount rate is 9%:
= $1400/(1+8%)^3+$1400/(1+9%)^2+$1400/(1+9%) = $3,543.81
I attached the calculation in excel for your reference.