Assume an individual makes a lump sum investment at the beginning of year one of $40,311, the present value of which is $40,311. The investors discount rate, for an alternative safe investment, is 11.71 percent after tax. The expected return on this investment (received at each year-end) is as follows.

Year 1: 14,654

Year 2: 7,646

Year 3: 19,230

Year 4: 16,114