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John has an investment opportunity that promises to pay him $12,500 in four years. He could...

John has an investment opportunity that promises to pay him $12,500 in four years. He could earn a 5% annual return investing his money elsewhere. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What is the maximum amount he would be willing to invest in this opportunity? (Round your final answers to the nearest whole dollar amount.)

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Answer #1

$ Amount after 4 years PV factor (5%, 4 years) 12,500 0.8227 Amount to be invested ($ 12,500 x 0.8227) $ 10,284 Answer: John

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