, You are considering investing in a security that will pay you $5,000 in 26 years. a. If the…

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,

You are considering investing in a security that will pay you $5,000 in 26 years.

a. If the appropriate discount rate is 10 percent, what is the present value of this investment?

b. Assume these investments sell for $1,640 in return for which you receive $5,000 in 26 years. What is the rate of return investors earn

on this investment if they buy it for $1,640?

a. If the appropriate discount rate is 10 percent, the present value of this investment is $

b. The rate of return investors can earn on this investment if they buy it for $1,640 is

(Round to the nearest cent.)

%. (Round to two decimal places.)

Expert Answer:

Answer rating: 100% (QA)

A P 1 r n nt 5 000 P 1 0 1 26 26 5 000 1 10495884P P 4 525

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