Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year free of teaching and other administrative responsibilities at full pay. For a professor earning $125,000 per year who works for a total of 42 years, what is the present value of the amount she will earn while on sabbatical if the interest rate is 3% (EAR)? Note: Assume that the sabbatical annual salary is paid in one lump sum every 7 years.

Please show what formula was used and working out. Please do not use excel

what is the the equivalent discount rate is ____%

What is the present value of the amount she will earn on sabbatical is $_____