Present value=$2000*Present value of discounting factor(rate%,time period)
=2000/1.1^3
=2000*0.751314801
=$1502(Approx).
Assume that a borrower is willing to pay you $2,000 at the end of three years...
How much should you be willing to pay for a lump sum of $2,000 7 years from now if you can earn 4% every 6 months on other similar investments?
8.Your friend needs a loan now and is willing to pay you back $100 in 1 year and another $100 in 2 years. (i.e. you will receive both payments) How much are you willing to lend your friend now if you want an interest rate of 6%? Question options: $178 $183.34 $200
How much should you be willing to pay for a lump sum of $7,000 3 years from now if you can earn 2% every 6 months on other similar investments The amount you should be willing to pay, PV, is S (Round to the nearest cent.)
You are willing to pay $30,000 now to purchase a perpetuity that will pay you and your heirs $1,200 each year, forever, starting at the end of this year. If your required rate of return does not change, how much would you be willing to pay if this were a 30-year annual payment, ordinary annuity instead of perpetuity?
Assume that you are faced with an opportunity made up of three equally likely outcomes. If the first outcome occurs, you receive $10. If the second outcome occurs, you receive no money. If the third outcome occurs, you must pay out $1. Given that you can be characterized as risk neutral, how much would you pay to take this risk? Would you be willing to pay more or less for this opportunity? Explain.
Three years from now you need to pay a loan (onetime) of $6,000. Also, you have planned to buy a car with $15,000 then. Now you work for an NGO (no pay) in the Amazon forest, and expect to get a reward of $10,000 after three years of service. How much money do you have to put now in a bank at 9% interest (compound). so that you meet these two expenses after 3 years? A.. $9, 090 B. 3,...
Three years from now you need to pay a loan (onetime) of $6,000. Also, you have planned to buy a car with $15,000 then. Now you work for an NGO (no pay) in the Amazon forest, and expect to get a reward of $10,000 after three years of service. How much money do you have to put now in a bank at 9% interest (compound). so that you meet these two expenses after 3 years? A.. $9, 090 B. 3,...
If you are willing to pay $46,850.00 today to receive $4,341.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $20,509.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 7.00% discount rate. What discount rate would make you indifferent between receiving $3,727.00 per year forever and $5,271.00 per year...
If you are willing to pay $44,793.00 today to receive $4,189.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $29,453.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 15.00% discount rate. What discount rate would make you indifferent between receiving $3,526.00 per year forever and $5,610.00 per year...
(5) You are considering buying an office building. You estimate that you will receive $1,100 at the end of every month for 20 years as rent (triple net). You want to earn a 10% rate of return per year. (a) First assume building has no value at the end of 20 years). How much would you be willing to pay for the building; i.e. what is the worth today of the net rent to be received in the future? (b)...