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BWomack214
20.03.2020 •
Business
Eric is considering an investment that will pay $5,000 a year for seven years, starting one year from today. How much should she pay for this investment if she wishes to earn a 13 percent rate of return?
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Ответ:
She should pay $22,113 for this investment
Explanation:
A fix payment for a specified period of time and compounding on specified rate is called annuity. $5,000 per year payment for seven years is also an annuity and its today value can be determined by following formula
Present value of Annuity = P [ 1 - ( ( 1 + r )^-n ) / r ]
P = Payments = $5,000
r = required rate of return = 13%
n = Number of years = 7
Present value of Annuity = $5,000 x [ 1 - ( ( 1 + 13% )^-7 ) / 13% ]
Present value of Annuity = $5,000 x [ 1 - ( ( 1 + 0.13 )^-7 ) / 0.13 ]
Present value of Annuity = $5,000 x [ 1 - ( ( 1.13 )^-7 ) / 0.13 ]
Present value of Annuity = $5,000 x 4.42261
Present value of Annuity = $22,113
Ответ:
strategic takes a long time, its like long division in math. Control, you cant control most things unless ur a big person in a company/buisiness.
Explanation: