I need a detailed explanation and assistance to solve this problem: An investment offers $6,800 per year for 20 years, with the first payment occuring one year from now. a) If the required return is 7%, what is the present value of the investment? b) at 7% return, what would the value be today, if the payments occured for 45 years? c) What would the present value be, if the payments occured for 70 years? d) What would the present value be, if the payments occured forever?
I need a detailed explanation and assistance to solve this problem: An investment offers $6,800 per year for 20 years, with the first payment occuring one year from now. a) If the required return is 7%, what is the present value of the investment? b) at 7% return, what would the value be today, if the payments occured for 45 years? c) What would the present value be, if the payments occured for 70 years? d) What would the present value be, if the payments occured forever?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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I need a detailed explanation and assistance to solve this problem:
An investment offers $6,800 per year for 20 years, with the first payment occuring one year from now.
a) If the required return is 7%, what is the present value of the investment?
b) at 7% return, what would the value be today, if the payments occured for 45 years?
c) What would the present value be, if the payments occured for 70 years?
d) What would the present value be, if the payments occured forever?
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