Question

Question 2 1 pts You're offered an investment that will pay you 5,317 in one year, 9,286 in two years, and 3,500 in 3 years. If you require a return of 4%, what is this investment worth to you? Question 3 1 pts What is the future value of a stream of payments in the amount of 1,514 to be received 7 times per year for 2 years if you require a return of 9%? (Enter the absolute value of your response to 2 decimal places ex: 123.45 NOT-123.45)

Answer 1

Question 2.

Given,

Payment in one year (P₁) = 5317

Payment in two years (P₂) = 9286

Payment in three years (P₃) = 3500

Required return (r) = 4% or 0.04

Solution :-

Investment value = [P₁/(1 + r)] + [P₂/(1 + r)²] + [P₃/(1 + r)³]

= [5317/(1 + 0.04)] + [9286/(1 + 0.04)²] + [3500/(1 + 0.04)³]

= [5317/(1.04)] + [9286/(1.04)²] + [3500/(1.04)³]

= 5112.50 + [9286/1.0816] + [3500/1.124864]

= 5112.50 + 8585.42899408 + 3111.48725534 = 16809.42