I am a novice at finance subjects and need to find out Present value given a few details
The university fees of $45,000 a year will have be paid starting 11 years from today. He is analysing an insurance plan that pays out $45,000 a year for 4 years with the first payout 11 years from today. The insurance plan has several payment options:
Option 1 Pay $60,000 today
Option 2 Beginning 1 year from today, pay $12,000 a year for the next 8 years
Option 3 Beginning 1 year from today, make payments each year for the next 8 years. The first payment is $11,000 and the amount increases by 5% each year
The question is asking to calculate Present Value for each option with a 10% discount rate.
I understand that PV = FV / (1 + r)^t
Am I right to say that FV is $180,000, r is 0.1 and t is 11 years? And if so, Option 1 PV = $180000 / 1.1^11 = $63088.90
But I am stucked for Option 2 and 3, how do I move on from here?