Hello,

I am a little lost on this question. I was able to get the answer using PV formula for each month. But the question wants us to use a single formula to get the right answer. I need help with what single formula to use in the highlighted yellow box.

Hopefully that makes sense?

Question 3 A privately run, for-profit, prison is considering ways in which it can cut its monthly costs and therefore increase profit. One idea it is considering is to pay a judge to guarantee convicted prisoners in poor health win their appeals and are set free. $49,701 The prison believes it can realize the monthly cost savings below over the initial year of the plan. What is the present 4 points value of the first year's monthly cost savings? Assume a discount rate of 8%. Month Savings ($) 1 3,500 2 6,000 3 6,500 4 9,000 5 9,000 6 9,000 7 9,400 8 9,800 9 4,800 10 5,000 11 2,000 12 3,500 Total 77,500 $3,240.74 $5,144.03 $5,159.91 $6,615.27 $6,125.25 $5,671.53 $5,484.81 $5,294.64 $2,401.20 $2,315.97 $857.77 $1.389.90 $49,701.00