Answered

Welcome to Westonci.ca, the place where your questions are answered by a community of knowledgeable contributors. Get immediate answers to your questions from a wide network of experienced professionals on our Q&A platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

Jing Associates, LLC, a large law firm in Denver, is building a new office complex. To pay for the construction, Jing Associates is selling a security that will pay the investor the lump sum of $38,600 in nine years. The current market price of the security is $16,429. Assuming that you can earn an annual return of 8.25% on your next most attractive investment, how much is the security worth to you today

Sagot :

facundobuzzetti

Answer:

PV= $18,911.94

Explanation:

Giving the following information:

Future Value= $38,600

Interest rate= 8.25%

Number of periods= 9 years

To calculate the present value of the security, we need to use the following formula:

PV= FV / (1+i)^n

PV= 38,600 / (1.0825^9)

PV= $18,911.94

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.