Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end of each of the next 5 years. He must invest $15,000 at the start of the first year and an additional $15,000 at the end of the first year. What is the present value of this investment if the interest rate is 8%?
Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end of each of the next 5 years. He must invest $15,000 at the start of the first year and an additional $15,000 at the end of the first year. What is the present value of this investment if the interest rate is 8%?
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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9. Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end of each of the next 5 years. He must invest $15,000 at the start of the first year and an additional $15,000 at the end of the first year. What is the present value of this investment if the interest rate is 8%?
Transcribed Image Text:S Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end of each of the next 5 years. He must invest $15,000 at the start of the first year
and an additional $15,000 at the end of the first year. What is the present value of this investment if the interest rate is 8%?
k,
O A. -$19,188.38
O B. - $1,056.44
O C. $19,188.38
O D. $1,056.44
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