what is the PV of such a deal? What is the PV if the payments covers only the years from 2000 to 2050 inclusive? What can you conclude for the comparison
what is the PV of such a deal? What is the PV if the payments covers only the years from 2000 to 2050 inclusive? What can you conclude for the comparison
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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Assume it is now January 1, 2000, and someone offers the following deal: starting from year 2000, you will be paid each year the amount of dollars equal to the year, i.e., $2000, $2001, $2002, .... until year 3000 inclusive. If payments occur at the year end and the interest rate remains at 10%, what is the PV of such a deal? What is the PV if the payments covers only the years from 2000 to 2050 inclusive? What can you conclude for the comparison
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