You have graduated and need a new car. Uncle Henry will lend you the money if you pay him back in 4 years and offer to pay him the rate of interest that he would get by putting his money in a savings account. You can pay him $5000 in year 1 and then $8000 each year for the next 3 years. If Uncle Henry otherwise earn 6% per year on his savings, how much can you borrow from him?
so basically what you need to do is to find the present values of all the money that you can pay him back in 4 years.
for the first year you ...