Question

CSePub Home Book Store Instructors Independent Authors About that pnt he ㆋ receve1000years of SÍ 1500 00 per year if his dicuut late onths mestnents 1700%what is the varofhisogportuty today? Answer Format: Currency Round to: 2 decimal places Enter Answer Here 8 6 8 0

Answer 1

Answer:

Annual payment = $11,500
No. of Payments = 10
Annual Interest Rate = 17.00%

First payment will be received after 5 years

Value of Opportunity = $11,500 / 1.17^5 + $11,500 / 1.17^6 + $11,500 / 1.17^7 + ..... + $11,500 / 1.17^14
Value of Opportunity = $11,500 * (1/1.17^4) * (1 – (1/1.17)^10)/ 0.17
Value of Opportunity = $11,500 * 2.486064
Value of Opportunity = $28,589.74