You invest $1,400 today and expect to sell your investment for $3,200 in 10 years. a-1. Calculate the present value of the future payoff, if the interest rate is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2. Is this a good deal? b-1. Calculate the present value, if the interest rate is 11%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Is this a good deal?
You invest $1,400 today and expect to sell your investment for $3,200 in 10 years. a-1. Calculate the present value of the future payoff, if the interest rate is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2. Is this a good deal? b-1. Calculate the present value, if the interest rate is 11%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Is this a good deal?
Chapter13: Other Financing Alternatives
Section: Chapter Questions
Problem 1bM
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Question
You invest $1,400 today and expect to sell your investment for $3,200 in 10 years.
a-1. Calculate the present value of the future payoff, if the interest rate is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a-2. Is this a good deal?
b-1. Calculate the present value, if the interest rate is 11%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b-2. Is this a good deal?
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