If a corporation promises to pay you $80 per year for three years and $1,000 after three years, what is the maximum amount you would lend today if you wanted to earn 8%?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 22P
Question
If a corporation promises to pay you $80 per year
for three years and $1,000 after three years, what is
the maximum amount you would lend today if you
wanted to earn 8%?
Transcribed Image Text:If a corporation promises to pay you $80 per year for three years and $1,000 after three years, what is the maximum amount you would lend today if you wanted to earn 8%?
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