Interest rate = 8%
1st year earnings = 10,000
2nd year earnings = 25,000
3rd year earnings = 48,000
4th year earnings = 75,000
Find the present value of each earnings you will get
Present values of 1st earning = A/(1+I)^n
= 10000/(1+.08)
= 9259.259
Present values of 2nd earning = A/(1+I)^n
= 25000/(1+.08)^2
= 25000/ 1.1664
= 21433.471
Present values of 3rd earning = A/(1+I)^n
= 48000/(1+.08)^3
= 48000/ 1.259712
=38103.948
Present values of 4th earning = A/(1+I)^n
= 75000/(1+.08)^4
= 75000/1.36048896
= 55127.239
Total Present value = Present values of 1st earning+Present values of 2nd earning+Present values of 3rd earning+Present values of 4th earning
= 9259.259 + 21433.471+ 38103.948 + 55127.239
Present Value = 123923.917 >>>Answer
1st year earnings = 10,000
2nd year earnings = 25,000
3rd year earnings = 48,000
4th year earnings = 75,000
Find the present value of each earnings you will get
Present values of 1st earning = A/(1+I)^n
= 10000/(1+.08)
= 9259.259
Present values of 2nd earning = A/(1+I)^n
= 25000/(1+.08)^2
= 25000/ 1.1664
= 21433.471
Present values of 3rd earning = A/(1+I)^n
= 48000/(1+.08)^3
= 48000/ 1.259712
=38103.948
Present values of 4th earning = A/(1+I)^n
= 75000/(1+.08)^4
= 75000/1.36048896
= 55127.239
Total Present value = Present values of 1st earning+Present values of 2nd earning+Present values of 3rd earning+Present values of 4th earning
= 9259.259 + 21433.471+ 38103.948 + 55127.239
Present Value = 123923.917 >>>Answer