You have just purchased an investment that generates the following cash flows fo

Question

You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 7.33 percent.

You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 7.33 percent, compounded annually. How much is this investment worth today?

End of the year

1. $3,700

2. $1,325

3. $2,736

4. $2,552

What is the present value of this investment if 7.33 percent per year is the appropriate discount rate?

Round the answer to two decimal places

Explanation / Answer

Present Value = 3700/(1.0733^1)+1325/(1.0733^2)+2736/(1.0733^3)+2552/(1.0733^^4)

Present Value = 8733.441114

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.