Assume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment made at time 20. Using a constant effective interest rate of 7.3% per annum, calculate the present value at time 0 of the cashflows. Give your answer to 2 decimal places.
Assume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment made at time 20. Using a constant effective interest rate of 7.3% per annum, calculate the present value at time 0 of the cashflows. Give your answer to 2 decimal places.
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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Transcribed Image Text:Assume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment
made at time 20.
Using a constant effective interest rate of 7.3% per annum, calculate the present value at time 0 of the cashflows.
Give your answer to 2 decimal places.
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