Investment A is currently worth $77,700 and is growing at the rate of 11% per year compounded continuously. Investment B is currently worth $70,000 and is growing at the rate of 12% per year compounded continuously. After how many years will the two investments have the same value? The investments will have the same value after years. (Do not round until the final answer. Then round to the nearest tenth as needed.)

Investment A is currently worth $77,700 and is growing at the rate of 11% per year compounded continuously. Investment B is currently worth $70,000 and is growing at the rate of 12% per year compounded continuously. After how many years will the two investments have the same value? The investments will have the same value after years. (Do not round until the final answer. Then round to the nearest tenth as needed.)

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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An investment offers $9,200 per year for 17 years, with the first payment occurring one year from now. Assume the required return is 12 percent. a. What is the value of the investment today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be if the payments occurred for 42 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value be if the payments occurred for 77 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be if the payments occurred forever? (Do not round
Suppose you are going to invest $11,000 per year for six years. The appropriate interest rate is 9 percent. What is the future value if the payments are made on the last day of the year? What if the payments are made on the first day of the year? a) $82,756.68; $90,204.78 b) $90,204.78; $82,756.68 c) $49,345.10; $53,786.16 d) $53,786.16; $49,345.10
An investment offers $6,800 per year for 20 years, with the first payment occurring one year from now. a. If the required return is 7 percent, what is the value of the investment today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value today be if the payments occurred for 45 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value today be if the payments occurred for 70 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value today be if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Present value b. Present value C. Present value d. Present value
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?
An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?
An investment opportunity requires a payment of $910 for 12 years, starting a year from today. If your required rate of return is 6.5 percent, what is the value of the investment to you today? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)
An investment pays you $1000 at the end of each of the next 3 years. The investment will then pay you $2000 at the end of Year 4, $3000 at the end of Year 5, and $5000 at the end of Year 6. If the interest rate earned on the investment is 8 percent, what is its present value? What is its future value?
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Suppose you invest $2,000 today and receive $11,000 in five years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $2,000 upfront, but pays an equal amount at the end of each year for the next five years. If this investment has the same IRR as the first one, what is the amount you will receive each year?

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