Suppose the Interest Rate Is 3% and That You Are

question 92

Short Answer

Suppose the interest rate is 3% and that you are to receive three annual payments of $1,000, with the first payment today, the second payment one year from now, and the third payment two years from now. What is the present value of this stream of payments?

---

Definitions:

Deceased Customer

A deceased customer refers to an account holder or client of a bank or financial institution who has passed away, initiating specific legal and operational procedures regarding the handling of the individual's assets and accounts.

Check Payment

A method of payment wherein the payer writes a check to the payee, who then deposits or cashes the check to receive the amount specified.

Teller's Check

A bank check that is drawn on the bank's own funds and signed by a cashier.

Drawer

The entity or person who writes or creates a check, thereby instructing the bank to pay the stated amount to the party named on the check.