Consider an investment which pays $3,000 at the end of year 1, year 2, and year 3. In year 4, the investment will pay $4,000 and this payment will grow by 2% each year forever. If the appropriate interest rate is 9%, what is this investment worth today? (Show Using BA II Plus or By Hand)

Consider an investment which pays $3,000 at the end of year 1, year 2, and year 3. In year 4, the investment will pay $4,000 and this payment will grow by 2% each year forever. If the appropriate interest rate is 9%, what is this investment worth today? (Show Using BA II Plus or By Hand)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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Consider an investment which pays $3,000 at the end of year 1, year 2, and year 3. In year
4, the investment will pay $4,000 and this payment will grow by 2% each year forever. If the
appropriate interest rate is 9%, what is this investment worth today? (Show Using BA II Plus or By Hand)

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