How much would you pay today to receive $50 in one year and $60 in the second year if you can earn 15 percent interest on alternative investments of similar risk? $88.85?

The present value of an income of $60 in 2 years and $50 in 1 year at an interest rate of 15% can be computed as ...

... ($60/1.15 +$50)/1.15 = $88.85

The present value (PV) of an amount (A) received 1 year from now earning annual interest rate r is ...

... PV = A/(1 +r)

For a sequence of non-uniform payments, we can work backward through the years as we did above.

b

step-by-step explanation:

the equation of a line in point- slope form is

y - b = m(x - a)

where m is the slope and (a, b) a point on the line

calculate m using the slope formula

m = (y₂ - y₁ ) / (x₂ - x₁ )

with (x₁, y₁ ) = (0, 4) and (x₂, y₂ ) = (3, - 5) ← 2 points on the line

m = = = - 3

with m = - 3 and (a, b) = (3, - 5), then

y - (- 5) = - 3(x - 3), that is

y + 5 = - 3(x - 3) → b