Compute the present value of $4,600 paid in two years using the following discount rates: 7 percent in the first year, and 6 percent in the second year.
a. 4,055.72
b. 4,340.38
c. 4,665.12
d. 4,862.29
e. 5,151.11
Ans: present value of $4,600 paid in two years = 4600/(1.07*1.06)
present value of $4,600 paid in two years = 4,055.72
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