You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the interest rate of 7.0%. 1. What is the present value of the payments? 2. What if the payments started right now?
You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the interest rate of 7.0%. 1. What is the present value of the payments? 2. What if the payments started right now?
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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You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the
interest rate of 7.0%.
1. What is the present value of the payments?
2. What if the payments started right now?
Transcribed Image Text:You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the
interest rate of 7.0%.
1. What is the present value of the payments?
÷
2. What if the payments started right now?
Answer format: 123.12; For a percent value of 12.34% enter 12.34 (without the percent sign); Negative values should be entered with the minus sign. When given a
choice, pick the result that is correct up to rounding error. "None of the Above" is just as likely to be the correct answer as the others.
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