c) You are an engineer working for the city of Seoul. You have estimated the annual toll revenues from a newly proposed highway construction over 25 years as follows: An ($2,500,000)(n)(1.08)-1 n = 1, 2, ...,25 To validate the bond, you were asked to provide the estimated total present value of the toll revenue at an interest rate of 8%. Assuming annual compounding, calculate the present value of the estimated toll.
c) You are an engineer working for the city of Seoul. You have estimated the annual toll revenues from a newly proposed highway construction over 25 years as follows: An ($2,500,000)(n)(1.08)-1 n = 1, 2, ...,25 To validate the bond, you were asked to provide the estimated total present value of the toll revenue at an interest rate of 8%. Assuming annual compounding, calculate the present value of the estimated toll.
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:c) You are an engineer working for the city of Seoul. You have 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,..., 25
To validate the bond, you were asked to provide the estimated total present value of the toll revenue at an
interest rate of 8%. Assuming annual compounding, calculate the present value of the estimated toll.
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