Question

You are offered an investment that will pay you $250 in one year, $520 the next year, and $750 at the end of the third year. How much is this investment worth if the interest rate is 11%?

Answer 1

Answer: $1,196

Explanation:

Based on the information and the values that are provided in the question, the worth of the investment of the rate of interest is 11% will be calculated as:

=(250 / 1.11) + (520 / 1.11²) + (750 / 1.11³)

= 225.23 + 422.04 + 548.39

= $1,195.66

= $1196 approximately

The worth of the investment will be $1196.