You will receive $6,800 three years from now. The discount rate is 10 percent.

1. What is the value of your investment two years from now? Multiply $6,800 (1/1.10) or divide by 1.10 (one years discount rate at 10 percent).

2. What is the value of your investment one year from now? Multiply your answer to part a by (1/1.10).

3. What is the value of your investment today? Multiply your answer to part b by (1/1.10).

4. Use the formula to find the present value of $6,600 received three years from now at 10 percent interest.