An investment offers $8800 per year for 14 years with the first payment occuring one year from now. Assume the required returnis 12 percent. a. What is the value of investment today? b. What would the value be if the payment occured for 39 years? c. What would the value be if teh payments occured for 74 years? d. What would the value be if the payments occured forever?
An investment offers $8800 per year for 14 years with the first payment occuring one year from now. Assume the required returnis 12 percent. a. What is the value of investment today? b. What would the value be if the payment occured for 39 years? c. What would the value be if teh payments occured for 74 years? d. What would the value be if the payments occured forever?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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An investment offers $8800 per year for 14 years with the first payment occuring one year from now. Assume the required returnis 12 percent.
a. What is the value of investment today?
b. What would the value be if the payment occured for 39 years?
c. What would the value be if teh payments occured for 74 years?
d. What would the value be if the payments occured forever?
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