question archive An investment offers $4,350 per year for 15 years, with the first payment occurring one year from now
An investment offers $4,350 per year for 15 years, with the first payment occurring one year from now
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An investment offers $4,350 per year for 15 years, with the first payment occurring one year from now. If the required return is 6 percent, what is the present value of the investment? What would the value of the investment be if instead you received your first payment today?
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The present value of the investment = 4,350.00 [1 - (1 + 0.06) -15 / 0.06]
= $42,248.28
Receiving payment today
Present of Investment = 4,350.00 / (1 + 0.06)15
= $1,815.10
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