You will receive $$200$ a year for the next eight years from an insurance settlement. The interest rate is $6$ percent for the first three years and $7$ percent for the final five years. What is this settlement worth to you today?

$NPV=\frac{\text{\$}1,600}{(1\mathrm{.}06{)}^3(1\mathrm{.}07{)}^5},NPV=$$$1,884\mathrm{.}18$

Consider the following four alternatives:

$$132$ received in two years.

$$160$ received in five years.

$$200$ received in eight years.

$$220$ received in ten years.

The ranking of the four alternatives from most valuable to least valuable if the interest rate is $7\%$ per year would be:

$NPV=\frac{FCF}{(1+\text{W}\text{A}\text{C}\text{C})}$ time

Consider a growing perpetuity that will pay $$100$ in one year. Each year after that, you will receive a payment on the anniversary of the last payment that is $6\%$ larger than the last payment. This pattern of payments will continue forever. If the interest rate is $11\%,$ then the value of this perpetuity is:

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