You Just won a prize that will pay you $800 today and $500 a year for the next three years. Which is the correct formula for computing the present value as of today at 6 percent?
PV = $500/1.06 + $500/1.062 + $500/1.063
PV = $800 PV $800/1.06$500/1.06+$500/1.06 $500/1.06
PV = $800 + $500/1.06 $500/1.06 + $500/1.061
PV = $800 (1.06) + $500 + $500/1.06 $500/1.06
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