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How much money should you be willing to pay now for a guaranteed 6,000 pesos per year for 9 years starting next year, at a rate of return of 16% per year?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

How much money should you be willing to pay now for a guaranteed 6,000 pesos per year for 9 years starting next year, at a rate of return of 16% per year?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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