A pension fund manager knows that the following liabilities must be satisfied: Years from Now 1 Liability

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A pension fund manager knows that the following liabilities must be satisfied: Years from Now 1 Liability (in millions) 2 3 4 $2.0 3.0 5.4 5.8 Suppose that the pension fund manager wants to invest a sum of money that will sat- isfy this liability streara. Assuming that any amount that can be invested today can earn an annual interest rate of 7.6%, how much must be invested today to satisfy this liabil- ity stream?

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