Suppose you have 3 years to live and you value each year of life at $7 million but have a discount rate of 5%. How much do you value the rest of your life in today's dollars?

$19,950,000

Step-by-step explanation:

From the question, Value of a year of Life =$7,000,000

And Number of Years Left = 3 years

Then Total Value of Life left = Value Per Year X Number of Years Left

=$7,000,000 X 3

=$21,000,000

Note that a discount is the reduction in the actual value of a quantity by a certain amount or percentage.

If there is a discount of 5%.

5% of Total Life Value = (5/100) X 21000000

=0.05 X 21000000

= 1,050,000

Therefore :Value of Life = Actual Value - Discount Value

= 21000000-1050000

= $19,950,000

arrange the equations with like terms in columns.

analyze the coefficients of x or y.

add the equations and solve for the remaining variable.

substitute the value into either equation and solve.

check the solution.

step-by-step explanation: