What is the value of an investment that pays $22,000 every other year forever, i

Question

What is the value of an investment that pays $22,000 every other year forever, if the first payment occurs one year from today and the discount rate is 15 percent compounded daily? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value today $ What is the value today if the first payment occurs four years from today? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value today $

Explanation / Answer

Ans;

value is

v = 22000 / e^.15 + 22000/e^.15*3 + .....

v * e^.15*2 - 22000 * e^.15 = 22000/e^.15 + ...... = v

v*( e^.15*2 - 1 ) = 22000 * e^.15

v = $73,059.05

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.