An investment offers $9,500 per year for 15 years, with the first payment occurr

Question

An investment offers $9,500 per year for 15 years, with the first payment occurring 1 year from now. Assume the required return is 11 percent.

What is the value of the investment today? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

What would the value be if the payments occurred for 40 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

What would the value be if the payments occurred for 75 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

What would the value be if the payments occurred forever? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

An investment offers $9,500 per year for 15 years, with the first payment occurring 1 year from now. Assume the required return is 11 percent.

Explanation / Answer

1) As we know the PV of an ordinary annuity = PMT * [{1

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