Answer: Approximately $4,176.19 today for an investment that returns $800 each year for 6 years
Explanation:
To calculate the present value of an investment that returns $800 each year for 6 years at a discount rate of 4 percent, we can use the formula for the present value of an annuity:
PV = C x [(1 - (1 / (1 + r)^n)) / r]
where PV is the present value, C is the annual cash flow, r is the discount rate, and n is the number of years.
Plugging in the given values, we get:
PV = 800 x [(1 - (1 / (1 + 0.04)^6)) / 0.04]
PV = $4,176.19 (rounded to the nearest cent)
Therefore, if the discount rate is 4 percent, you would be willing to pay approximately $4,176.19 today for an investment that returns $800 each year for 6 years