FNCE 2P91 Chapter Notes -Annual Percentage Rate, Effective Interest Rate
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21 Oct 2014
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31.
You are valuing an investment that will pay you $25,000 per yearfor the first 6 years, $29,000 per year for the next 11 years, and$55,000 per year the following 13 years (all payments are at theend of each year). Another similar risk investment alternative isan account with a quoted annual interest rate of 12.00% withmonthly compounding of interest. What is the value in today'sdollars of the set of cash flows you have been offered?
$1,184,000.00 |
$241,479.10 |
$227,393.99 |
$285,669.77 |
$207,180.94 |