Ed Long promised to pay his son $370 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How much must Ed invest today to pay his son $370 semiannually for 11 years? (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value

Ed Long promised to pay his son $370 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How much must Ed invest today to pay his son $370 semiannually for 11 years? (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value

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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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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Ed Long promised to pay his son $370 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How
much must Ed invest today to pay his son $370 semiannually for 11 years? (Do not round intermediate calculations. Round your
answer to the nearest cent.)
Present value
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