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    Present Value of future payments

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    Your friend has given you a hot tip about an investment deal that will pay off $6,000 a year at the end of each of the next three years. If your required rate of return for investments with this degree of risk is 7%, approximately how much is the investment worth to you today?

    a. $4,900

    b. $14,695

    c. $15,745

    d. $19,290

    You've been offered the opportunity to invest $200,000 for 10 years in return for 10 annual payments of $30,000 each. What annual percent rate return will you get if you take the deal?

    a. Between 20 and 21%

    b. Between 16 and 17%

    c. Between 8 and 9%

    d. 15%

    From a financial point of view, which is the best choice, to receive $800 now, or a note that promises $1,000 three years from now? Threeyear interest rates are 7%.

    a. $800 now

    b. $1,000 three years from now

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    https://brainmass.com/business/annuity/present-value-of-future-payments-452502

    Solution Preview

    See attached Excel file.

    Your friend has given you a hot tip about an investment deal that will pay off $6,000 a year at the end of each of the next three years. If your required rate of return for investments with this degree of risk is 7%, approximately how much is the investment worth to you ...

    Solution Summary

    Solution helps in estimating Present Value of future payments;

    $2.19

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