Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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What would you pay for an investment that pays you $30,000 at the beginning of each year for the next ten years? Assume that the relevant interest rate for this type of investment is 8%.

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Step 1: Introduction

Present value can be defined as how much is the worth of the future sum of money at present provided a specific rate of return. The concept of present value is based on the principle that the value of a sum of money will not be similar to the value of that sum of money in the future.

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