A city engineer has estimated the annual tollrevenues from a newly proposed highway construction over 25 years as follows:An = (2,500,000)(n)(1.08)n - 1n = 1, 2, c , 25To validate the bond, the engineer was asked to presentthe estimated total present value of toll revenue at aninterest rate of 8%. Assuming annual compounding,find the present value of the estimated toll revenue
A city engineer has estimated the annual tollrevenues from a newly proposed highway construction over 25 years as follows:An = (2,500,000)(n)(1.08)n - 1n = 1, 2, c , 25To validate the bond, the engineer was asked to presentthe estimated total present value of toll revenue at aninterest rate of 8%. Assuming annual compounding,find the present value of the estimated toll revenue
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A city engineer has estimated the annual toll
revenues from a newly proposed highway construction over 25 years as follows:
An = (2,500,000)(n)(1.08)n - 1
n = 1, 2, c , 25
To validate the bond, the engineer was asked to present
the estimated total
interest rate of 8%. Assuming annual compounding,
find the present value of the estimated toll revenue
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