question archive An investment pas $2,000 every second year for 20 years (a total of 10 payments)
An investment pas $2,000 every second year for 20 years (a total of 10 payments)
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An investment pas $2,000 every second year for 20 years (a total of 10 payments). Your opportunity cost is 8% compounded semi annually. The present value of this investment is
$9,322.00.
$9.666.46.
$13,323.85.
$19.636.29.
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Answer:
rate positively ..
| EAR = | (1+8%/2)^2-1 | |||
| 8.1600% | ||||
| Year | Cash flow | PVIF @ 8.16% | Present value | |
| 2 | 2000 | 0.854804191 | $ 1,709.61 | |
| 4 | 2000 | 0.730690205 | $ 1,461.38 | |
| 6 | 2000 | 0.62459705 | $ 1,249.19 | |
| 8 | 2000 | 0.533908176 | $ 1,067.82 | |
| 10 | 2000 | 0.456386946 | $ 912.77 | |
| 12 | 2000 | 0.390121474 | $ 780.24 | |
| 14 | 2000 | 0.333477471 | $ 666.95 | |
| 16 | 2000 | 0.28505794 | $ 570.12 | |
| 18 | 2000 | 0.243668722 | $ 487.34 | |
| 20 | 2000 | 0.208289045 | $ 416.58 | |
| Present value | $ 9,322.00 | |||
| Ans = | $ 9,322.00 | |||
