You are given an investment to analyze. The cash flows from this investment are:
| End of year | |
| 1 | $27,950 |
| 2 | $1,470 |
| 3 | $26,100 |
| 4 | $20,590 |
| 5 | $9,350 |
What is the present value of this investment if 15 percent per year is the appropriate discount rate?
An investment vehicle promises to pay you $1,000 in year 1, $2,000 in year 2, $3,000 in year 3, and $4,000 in year 4, provided you deposit $X with them today.
If this is a fair deal and the interest rate is 9%, how much is X?
An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? Its future value?
An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $550 at the end of Year 6.
a. If other investments of equal risk earn 6% annually, what is its present value? Round the answer to the nearest cent.
b. If other investments of equal risk earn 6% annually, what is its future value? Round the answer to the nearest cent.
