Your employer has promised to give you a $5,000 bonus after you have been working for him for 5 years. What is the present value of this bonus if the proper discount rate is 8%?

 Your employer has promised to give you a $5,000 bonus after you have been working for him for 5 years. What is the present value of this bonus if the proper discount rate is 8%?

Answer

Present value = 5000 x (1.08)^-8 = 3402.92