Salvatore has the opportunity to invest in a scheme which will pay $5000 at the end of each of the next 5 years. He must invest $10,000 at the start of the first year and an additional $10,000 at the end of the first year. What is the present value of this investment if the interest rate is 3%?
A) -$3189.80
B) -$5907.57
C) 5907.57
D) $3189.80

Question

Quizplus · Accepted Answer

D) The first step is to calculate the investment in PV terms: using TVM keys input 11ea84dc_f578_618c_9a63_6999ce7045af_TB1316_11_TB1316_11 11ea84dc_f578_618d_9a63_8f500fea659d_TB1316_11_TB1316_11 11ea84dc_f578_618e_9a63_7bead6309c72_TB1316_11_TB1316_11 which gives 11ea84dc_f578_889f_9a63_b9a93261e293_TB1316_11_TB1316_11 total 11ea84dc_f578_88a0_9a63_d78c261a9f46_TB1316_11_TB1316_11 using CF keys input 11ea84dc_f578_88a1_9a63_f5df614dd78e_TB1316_11_TB1316_11 11ea84dc_f578_88a2_9a63_9b21cbe1b1f1_TB1316_11_TB1316_11 11ea84dc_f578_88a3_9a63_899e671d8805_TB1316_11_TB1316_11 using interest 11ea84dc_f578_88a4_9a63_816b1c0981d9_TB1316_11_TB1316_11 11ea84dc_f578_afb5_9a63_bff740586bea_TB1316_11_TB1316_11

Salvatore Has the Opportunity to Invest in a Scheme Which