An investment offers $5,700 per year, with the first payment occurring one year from now. The required return is 5 percent. a. What would the value be today if the payments occurred for 10 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be today if the payments occurred for 35 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value be today if the payments occurred for 65 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be today if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. $ 50,963.45 X $ 108,069.68 X $ 126,463.06 X $ 132,000.00 a. Present value of 10 annual payments b. Present value of 35 annual payments c. Present value of 65 annual payments d. Present value of annual payments forever

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
icon
Related questions
Question

Rahul

An investment offers $5,700 per year, with the first payment occurring one year from
now. The required return is 5 percent.
a. What would the value be today if the payments occurred for 10 years? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What would the value be today if the payments occurred for 35 years? (Do not round
32.16.)
* intermediate calculations and round your answer to 2 decimal places, e.g.,
c. What would the value be today if the payments occurred for 65 years? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
d. What would the value be today if the payments occurred forever? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer is complete but not entirely correct.
$
50,963.45 X
$
108,069.68 X
$
126,463.06 x
132,000.00
a. Present value of 10 annual payments
b. Present value of 35 annual payments
c. Present value of 65 annual payments
d. Present value of annual payments forever
LA
Transcribed Image Text:An investment offers $5,700 per year, with the first payment occurring one year from now. The required return is 5 percent. a. What would the value be today if the payments occurred for 10 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be today if the payments occurred for 35 years? (Do not round 32.16.) * intermediate calculations and round your answer to 2 decimal places, e.g., c. What would the value be today if the payments occurred for 65 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be today if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. $ 50,963.45 X $ 108,069.68 X $ 126,463.06 x 132,000.00 a. Present value of 10 annual payments b. Present value of 35 annual payments c. Present value of 65 annual payments d. Present value of annual payments forever LA
Expert Solution
steps

Step by step

Solved in 6 steps

Blurred answer
Knowledge Booster
Rate Of Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education