The present value of an income of $60 in 2 years and $50 in 1 year at an interest rate of 15% can be computed as ...
... ($60/1.15 +$50)/1.15 = $88.85
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The present value (PV) of an amount (A) received 1 year from now earning annual interest rate r is ...
... PV = A/(1 +r)
For a sequence of non-uniform payments, we can work backward through the years as we did above.
