An investment offers $10,000 at the end of each year for ten years. a. If you...
An investment offers $10,000 at the end of each year for ten
years.
| a. | If you can earn 10 percent annually, what is this investment worth today? |
| b. | If you do not spend the annual payment but invest it at 10 percent, how much will you have after the ten years have lapsed? |
Homework Answers
Answer
a)
PV=present value=?
A=annual payment =$10000
r=interest rate =10%
n=years=10
the amount is $61445.67106
=======
b)
FV=future value
A=annual payment =$10000
r=interest rate =10%
n=years=10
the amount is $159374.24601
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