Madison is thinking of buying an investment from PEP. If she purchases the investment, Madison will receive $1,000 every 3 months for 2 years. The first $1,000 payment will be made as soon as she buys the investment. If the required rate of return of Madison is 16%, what amount should she be willing to pay for this investment?  a. 1,345.60 b. 7,002.05 c. 10,764.80 d. 1,368.57

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
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Madison is thinking of buying an investment from PEP. If she purchases the investment, Madison will receive $1,000 every 3 months for 2 years. The first $1,000 payment will be made as soon as she buys the investment. If the required rate of return of Madison is 16%, what amount should she be willing to pay for this investment? 

a. 1,345.60

b. 7,002.05

c. 10,764.80

d. 1,368.57

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