Music producer, will receive royalties over a period of 3 years for the theme song she made for a TV program. The amount will be received at the end of each year as follows. Amount End of Year 1 R50 000 End of Year 2 R30 000 End of Year 3 R10 000 Find the present value (at the beginning of the first year) of all future royalties at a compound interest rate of 8% pa.
Music producer, will receive royalties over a period of 3 years for the theme song she made for a TV program. The amount will be received at the end of each year as follows. Amount End of Year 1 R50 000 End of Year 2 R30 000 End of Year 3 R10 000 Find the present value (at the beginning of the first year) of all future royalties at a compound interest rate of 8% pa.
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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Music producer, will receive royalties over a period of 3 years for the theme song she made
for a TV program. The amount will be received at the end of each year as follows.
Amount
End of Year 1
R50 000
End of Year 2
R30 000
End of Year 3
R10 000
Find the present value (at the beginning of the first year) of all future royalties at a compound
interest rate of 8% pa.
A. R71 444
B. R79 955
C. R82 865
D. R90 000
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