Question #187638

Find the present value of a series of investment of $1 at the end of each year for 25 years with effective

interest rate of 13.5% p.a.


1
Expert's answer
2021-05-07T11:28:02-0400

=P[1(1+r)nr]=P[\frac{1 - (1 +r) ^{-n}} {r}]


=$1[1(1+0.00135)250.00135]=\$1[\frac{1 - (1 +0.00135) ^{-25}} {0.00135}]


=$1[1(1.00135)250.00135]=\$1 [\frac{1 - (1.00135) ^{-25}} {0.00135 }]


=$1[1(10.967)0.00135]=\$1 [\frac{1 - (1 - 0.967)} {0.00135 }]


=$1(24.44)=\$1 (24.44)


Present Value =$24.44\$24.44


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

Assignment Expert
10.05.21, 23:06

Dear sheldon, please use the panel for submitting a new question.

sheldon
10.05.21, 20:01

An investment is discounted for 28 days at a simple rate of discount of 4.5% per annum. Calculate the annual effective rate of interest.

LATEST TUTORIALS
APPROVED BY CLIENTS