Nathan Corporation earns 11% on an investment that pays back $220,000, at the en

Question

Nathan Corporation earns 11% on an investment that pays back $220,000, at the end of the 5 years. Below is some of the time value of money information that Danner has compiled that might help in planning compounded interest decisions.
Present Value of 1 for 5 periods at 11%...............0.59345
Future Value of 1 for 5 periods at 11%................1.68506
Present Value of an annuity for 5 periods at 11%..3.69590
Future Value of an annuity for 5 periods at 11%....6.22780
To the closest dollar, what is the amount Nathan should invest now to earn 11% rate of return?

Explanation / Answer

Amount Nathan should invest now to earn 11% rate of return is $130,559 $130,559 Statement showing Cash flows Particulars Time PVf@11% Amount PV Cash inflows                   5.00               0.59345                         220,000.00                         130,559.00 PV of Cash Inflows                         130,559.00

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