Answer:
Explanation:
Present value is found by discounting future values using a discount/interest rate.
Current year PV of $5000 is $5000.
A year in future PV is $5000/(1+r)^n which is $5000/(1.06)^1
= $4,716.98 is what $5000 in a year from now is worth.
Two years in future is $5000/(1+r)^r which will now be $5000/(1.06)^2
= $4,449.98 is what $5000 two years from now is worth today.
Add all figures up to get your Present value.
=5000 + 4,716.98 + 4,449.98
= $14,166.96 is the present value.
