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

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

Question:

Don't use plagiarized sources. Get Your Custom Assignment on
, You are considering investing in a security that will pay you $5,000 in 26 years. a. If the…
From as Little as $13/Page

 

Transcribed Image Text:

,
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
View the full answer