Problem:
The furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay for the furniture in three equal annual end-of-the- year payments of $1,100 each with the first payment to be made one year from today. If the discount rate is 6 %,
Required:
Question 1: What is the present value of the furniture payments.
Note: Please provide reasons to support your answer.