You have just received a windfall from an investment you made in a friend's business. She will be paying you $ 29 comma 403 at the end of this year, $ 58 comma 806 at the end of next year, and $ 88 comma 209 at the end of the year after that (three years from today). The interest rate is 10.5 % per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?
You have just received a windfall from an investment you made in a friend's business. She will be paying you $ 29 comma 403 at the end of this year, $ 58 comma 806 at the end of next year, and $ 88 comma 209 at the end of the year after that (three years from today). The interest rate is 10.5 % per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?
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 have just received a windfall from an investment you made in a friend's business. She will be paying you $ 29 comma 403 at the end of this year, $ 58 comma 806 at the end of next year, and $ 88 comma 209 at the end of the year after that (three years from today). The interest rate is 10.5 % per year.
a. What is the present value of your windfall?
b. What is the future value of your windfall in three years (on the date of the last payment)?
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