present value

An investment pays you $20,000 at the end of this year, and $10,000 at the end of each of the four following years. What is the present value (PV) of this investment, given that the interest rate is 4% per year?

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  1. PV = 20000(1.04)^-1 + 10000(1.04^-2 + 1.04^-3 + 1.04^-4 + 1.04^-5)
    = ...

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