An investment offers $12,000 per year for 20 years, with the first payment occurring one year from now. If the required return is 11 percent, what is the value of the investment? What would the value be if the payments occurred for 35 years? For 60 years? Forever?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 22P
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An investment offers $12,000 per year for 20 years, with the first payment occurring one year from
now. If the required return is 11 percent, what is the value of the investment? What would the value be if
a)
the payments occurred for 35 years? For 60 years? Forever?
Transcribed Image Text:An investment offers $12,000 per year for 20 years, with the first payment occurring one year from now. If the required return is 11 percent, what is the value of the investment? What would the value be if a) the payments occurred for 35 years? For 60 years? Forever?
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