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
Related questions
Question
How 0.0851 get in the solution given for r?

Transcribed Image Text:1. The Lexington Property Development Company has a RM10,000 note receivable
from a customer due in three years. How much is the note worth today if the interest rate
is
c. 8% compounded quarterly?

Transcribed Image Text:c. R=8%
Present value = Future value/ (1+r)^n
= 10,000 / (1+0.0851)^3
= 7884.93
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