Hello I have a few problems that I am stuck on. If the required return is 7 perc

Question

Hello I have a few problems that I am stuck on.

If the required return is 7 percent, what is the value of the investment? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

What would the value be if the payments occurred for 45 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

What would the value be if the payments occurred for 70 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

  

  

What would the value be if the payments occurred forever? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

  

An investment offers $6,200 per year for 20 years, with the first payment occurring one year from now.   

If the required return is 7 percent, what is the value of the investment? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

1. present value = Payment per period [(1+i)^n -1/ i(1+i)^n]

= $6,200 [ (1+.07)^20 - 1/ .07 (1+.07)^20]

= $ $65,682.89

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