Marshall has received an inheritance and wants to invest a sum of money today that will...

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Marshall has received an inheritance and wants to invest a sum of money today that will...

Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,200 at the end of each of the next 10 years. Assuming he can earn an interest rate of 5% compounded annually, how much of his inheritance must he invest today?

$52,000.00

$49,400.00

$46,930.00

$40,152.84

$104,000.00

business finance

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Answer 1

Answer #1

Present value of such inflows=$5200*Present value of annuity factor(5%,10)

=$5200*7.7217 (approx)

=$40,152.84 (approx)

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Answer 2

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