You just signed a business contract with one of your clients. The client will pay you $75,000 a year for five years for the service you will provide. This payment will be adjusted for inflation. You anticipate the general inflation rate over this period to be 3%. If your desired inflation-free interest rate (real interest rate) is to be 4%, what is the worth of the fifth payment in present dollars? Assume the client will pay the consulting fee at the end of each year.
You just signed a business contract with one of your clients. The client will pay you $75,000 a year for five years for the service you will provide. This payment will be adjusted for inflation. You anticipate the general inflation rate over this period to be 3%. If your desired inflation-free interest rate (real interest rate) is to be 4%, what is the worth of the fifth payment in present dollars? Assume the client will pay the consulting fee at the end of each year.
Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
Problem 1.1MA
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You just signed a business contract with one of your clients. The client will pay you $75,000 a year for five years for the service you will provide. This payment will be adjusted for inflation. You anticipate the general inflation rate over this period to be 3%. If your desired inflation-free interest rate (real interest rate) is to be 4%, what is the worth of the fifth payment in present dollars? Assume the client will pay the consulting fee at the end of each year.
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