Problem:
Your local travel agent is advertising an upscale winter vacation package for travel three years from now to Antarctica. The package requires that you pay $20,000 today, $35,000 one year from today, and a final payment of $45,000 on the day you depart three years from today.
Required:
Question: What is the cost of this vacation in today's dollars if the discount rate is 9.75 percent?
Note: Please provide step by step solution.