You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the interest rate of 7.0%. 1. What is the present value of the payments? 2. What if the payments started right now?
You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the interest rate of 7.0%. 1. What is the present value of the payments? 2. What if the payments started right now?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....
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You are promised yearly payments of 200 EUR forever from your fairy godmother. The first payment is coming in 2 years. Your bank is willing to lend you money at the
interest rate of 7.0%.
1. What is the present value of the payments?
2. What if the payments started right now?
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