Assume you have to make payments of $44,000 one year from now, another $48,400 in two years, and a final $39,930 in three years.If a bank paid a fixed interest rate of i = 10% over the next three years, how much money would you have to put into the bank now to be able to makes these payments?

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To find out how much money needs to be deposited now to make the future payments, we use the present value formula for each payment and sum them up. The formula for present value is $PV = \frac{FV}{(1+i)^n}$, where $PV$ is the present value, $FV$ is the future value, $i$ is the interest rate, and $n$ is the number of periods.1. For the $44,000 payment in one year: $PV = \frac{44,000}{(1+0.10)^1} = \frac{44,000}{1.10} = 40,000$2. For the $48,400 payment in two years: $PV = \frac{48,400}{(1+0.10)^2} = \frac{48,400}{1.21} = 40,000$3. For the $39,930 payment in three years: $PV = \frac{39,930}{(1+0.10)^3} = \frac{39,930}{1.331} = 30,000$Adding these up: $40,000 + 40,000 + 30,000 = 110,000$Therefore, you would need to deposit $110,000 now to make the future payments.

Assume You Have to Make Payments of $44,000 One Year