question archive An investment will pay $5,880 twelve years from now
An investment will pay $5,880 twelve years from now
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An investment will pay $5,880 twelve years from now. If the going interest rate on this type of investment is 7.88%, how much is the investment worth today? O a S2428 b. $2510 OC. $2175 d. 52374 O e S2567
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Answer:
An investment will pay $5,880 twelve years from now
r = 7.85%
t = 12 years
Present Value = Future Value of investment in 12 years/(1+r)^t
= $5880/(1+7.85%)^12
= 2374.2996736
Or, $2,374.30
Answer is d. $2,374
