Homework Answers
Minimum price = Present value of all Future interest + Present value of initial investment
= 700 x P/A(9%, 3) + 8,000 x P/F(9%, 3)
= 700 x 2.5313** + 8,000 x 0.772183**
= 1,771.91 + 6,177.46
= 7,949
**From P/A and P/F factor tables
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