Ed Long promised to pay his son $370 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How much must Ed invest today to pay his son $370 semiannually for 11 years? (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value

Ed Long promised to pay his son $370 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How much must Ed invest today to pay his son $370 semiannually for 11 years? (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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Ed Long promised to pay his son $370 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How
much must Ed invest today to pay his son $370 semiannually for 11 years? (Do not round intermediate calculations. Round your
answer to the nearest cent.)
Present value
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