You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of $15,000, $25,000, $40,000, and $60,000 to you each year over the next four years, respectively. All payments will be made at the end of the year. If the appropriate interest rate is 3.7 percent, what is the value of the settlement offer today?

All payments will be made at the end of the year by using the present value of inflows

Step-by-step explanation:

Present Value Of Inflows = Cash Inflow × Present Value Of Discounting Factor (Rate%,Time Period)

Present Value Of Inflows = + + +

Present Value Of Inflows = 125466.3

set each factor equal to 0

4x-3 = 0

2x-1 = 0

solve for x.

4x-3=0

4x=3

x= 3/4

solve for x. 

2x-1= 0

2x= 1

x= 1/2

eventually after a few more steps, your answer should be 1/2 is less than or equal to x and 3/4 is greater than or equal to x

1 number

if we use a graphing calculator, there is only one such number that satisfies the conclusion of the mean value theorem, that is, a number such that

where the right-hand side is the average rate of change of f on the interval [0.5,0.75], which is the slope of the secant line.

in the attached graph, the black line is the secant line which has its slope as the average rate of change of f on [0.5,0.75], while the orange line is the only tangent line to the graph of f in the interval that satisfies the mvt conclusion.