For winning first prize in an essay contest, you are offered a choice of prizes:
A. a single payment of P dollars now; or
B. two payments: $300 one year from now and $400 two years from now.
To the nearest cent, what would P have to be in order for choices A and B to have equal value?
Assume that all payments will be deposited as soon as they are received into an account paying 5%
interest, compounded annually.