An investment offers $6,500 per year, with the first payment occurring one year from now. The required return is 7 percent. a. What would the value be today if the payments occurred for 20 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 45 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 70 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.) a. Present value of 20 annual payments b. Present value of 45 annual payments c. Present value of 70 annual payments d. Present value of annual payments forever
An investment offers $6,500 per year, with the first payment occurring one year from now. The required return is 7 percent. a. What would the value be today if the payments occurred for 20 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 45 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 70 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.) a. Present value of 20 annual payments b. Present value of 45 annual payments c. Present value of 70 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
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E11
Transcribed Image Text:An investment offers $6,500 per year, with the first payment occurring one year from
now. The required return is 7 percent.
a. What would the value be today if the payments occurred for 20 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 45 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 70 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.)
a. Present value of 20 annual payments
b. Present value of 45 annual payments
c. Present value of 70 annual payments
d. Present value of annual payments forever
80
000
000
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