Present value with rational discount

Statement

In $3$ years the Ferraboschi firm will receive $4200\ \text{€}$. With a (rational) discount rate of $5\%$ per year, what is the present value today?

Solution

Rational discount gives $V=\dfrac{M}{1+r\,t}$. $V=\frac{4200}{1+0{.}05\cdot 3}=\frac{4200}{1{.}15}\approx\boxed{3652{.}17\ \text{€}}.$