An author just signed a lucrative contract with a publisher that offers to pay her the amount of $500 at the end of year 8 when the book is scheduled to be released. The author, being profligate, desires to receive a different package: an immediate payment of $100 that is followed by an annuity (an equal amount) to be paid at the end of each year for 8 consecutive years. What annuity will make his package equivalent to the publisher's advance. Use an interest rate is 5.00%. $ Place your answer in dollars and cents. Do not use a dollar sign. Work answers out to at least 4 decimal points of accuracy.

An author just signed a lucrative contract with a publisher that offers to pay her the amount of $500 at the end of year 8 when the book is scheduled to be released. The author, being profligate, desires to receive a different package: an immediate payment of $100 that is followed by an annuity (an equal amount) to be paid at the end of each year for 8 consecutive years. What annuity will make his package equivalent to the publisher's advance. Use an interest rate is 5.00%. $ Place your answer in dollars and cents. Do not use a dollar sign. Work answers out to at least 4 decimal points of accuracy.

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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Similar questions

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