You are considering investing in a security that will pay you $2,000 in 30 years. a. If the appropriate discount rate is 11 percent, what is the present value of this investment? b. Assume these investments sell for $766 in return for which you receive $2,000 in 30 years. What is the rate of return investors earn on this investment if they buy it for $766?
You are considering investing in a security that will pay you $2,000 in 30 years. a. If the appropriate discount rate is 11 percent, what is the present value of this investment? b. Assume these investments sell for $766 in return for which you receive $2,000 in 30 years. What is the rate of return investors earn on this investment if they buy it for $766?
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
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Transcribed Image Text:You are considering investing in a security that will pay you $2,000 in 30 years. a. If the appropriate discount rate is 11 percent, what is the present value of
this investment? b. Assume these investments sell for $766 in return for which you receive $2,000 in 30 years. What is the rate of return investors earn on
this investment if they buy it for $766?
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