pa scholarsh an be invested a today?

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
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Please do it on excel like you did on the last time thanks 

pa scholarsh
an be invested a
today?
Transcribed Image Text:pa scholarsh an be invested a today?
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Step 1

 

1. Present Value is the amount of money we invest today. Since it is semi annually the rate of interest will be divided by 2 and the number of years will be calculated on 10 periods at 2.5% rate of interest.

By looking periods and rate in present value of an annuity table, the intersection gives present value of 8.7521

 

Present Value=Ordinary Annuity x table value

                      =$20,000 x 8.7521

                      =$175,042

 

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