A new start-up company promises to pay an investor each quarter for the next two years....
A new start-up company promises to pay an investor each quarter for the next two years. The company will pay $20,675.00 per quarter for the first four quarters, and then $25,775.00 per quarter for the following four quarters. If the investor wants a 11.68% APR return with quarterly compounding, what is the value of the investment opportunity today?
Homework Answers
| 1) | The quarterly interest rate = 11.68%/4 = 2.92% | ||
| 2) | PV of the payment for the first 4 quarters = 20675*(1.0292^4-1)/(0.0292*1.0292^4) = | $ 76,998.26 | |
| 3) | Discounted value of the second 4 quarterly payments at EOY1, that is at the end of the 4th quarter = 25775*(1.0292^4-1)/(0.0292*1.0292^4) = | $ 95,991.78 | |
| PV of the second stream of quarterly payments = 95991.78/1.0292^4 = | $ 85,552.94 | ||
| Value of the investment opportunity | $ 1,62,551.20 |
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A new start-up company promises to pay an investor each quarter
for the next two years....
CSePub Home Book Store Instructors Independent Authors About A new start-up company promises to pay an...
CSePub Home Book Store Instructors Independent Authors About A new start-up company promises to pay an investor each quarter for the next two years. The company will pay $20,125.00 per quarter for the first turquaters, andthen S25,100 00 per quarter for the flowing four quarters Ifthe investor wants a & 92% APR return w h quarterly compouniding, what is the value of the investment opportunity today? Answer Format: Currency: Round to: 2 decimal places Enter Answer Here Submit Answer Prew...
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(Round your interest rate to the nearest whole
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CSePub Home Book Store Instructors Independent Authors About A new start-up company promises to pay an investor each quarter for the next two years. The company will pay $20,125.00 per quarter for the first turquaters, andthen S25,100 00 per quarter for the flowing four quarters Ifthe investor wants a & 92% APR return w h quarterly compouniding, what is the value of the investment opportunity today? Answer Format: Currency: Round to: 2 decimal places Enter Answer Here Submit Answer Prew...
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John has an investment opportunity that promises to pay him
$14,104 in four years. Suppose the opportunity requires John to
invest $10,760 today.
(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 interest rate John would earn on this investment?
(Round your interest rate to the nearest whole
percentage.)
Please show me the work, thank you!
Solve for i Present...
Use financial calc if
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