Answered

Westonci.ca is the premier destination for reliable answers to your questions, provided by a community of experts. Connect with a community of experts ready to provide precise solutions to your questions quickly and accurately. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

An investment offers $6,200 per year for 20 years, with the first payment occurring one year from now. If the required return is 7 percent, what is the value of the investment

Sagot :

abiolataiwo2015

Answer:

$65,682.89

Explanation:

Calculation for what is the value of the investment

Using this formula

PVA = C({1 − [1 / (1 + r)t]} / r)

Let plug in the formula

Where,

C represent Investment offer =$6,200

R represent Required Return=7%

T =20 years

PVA = $6,200{[1 − (1 /( 1+.07*20 years)] / .07

PVA = $6,200{[1 − (1 / 1.07*20 years)] / .07}

PVA = $6,200{[1 − (1 / 2.14)] / .07}

PVA= $65,682.89

Therefore the value of the investment will be $65,682.89

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.