Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400
Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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| j. Find the PV and the FV of an investment that makes the following end-of-year payments. The | |||||
| interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400 | |||||
| Year | Payment | ||||
| 1 | 100 | ||||
| 2 | 200 | ||||
| 3 | 400 | ||||
| Rate | 8% | ||||
| To find the PV, use the |
Pv= | $581.59 | |||
| Year | Payment | x | (1+ I)^(N- t) | = | FV |
| 1 | 100 | ||||
| 2 | 200 | ||||
| 3 | 400 | ||||
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