Question
In: Finance
What is the value today of a money machine that will pay $2,314.00 every six months...
What is the value today of a money machine that will pay $2,314.00 every six months for 22.00 years? Assume the first payment is made 1.00 years from today and the interest rate is 11.00%.
the answer is 36,098.07, can you please show me how you get to that answer? either by formula or calculator is fine
(the question is right, the question said that the 1st payment is made by the end of year 1 and not by the end of 6 months) -in response to the comment
Solutions
Expert Solution
ANNUAL RATE = 11%, SO HALF YEARLY RATE = 5.5%
AS PAYMENTS ARE HALF YEARLY, NO OF PERIODS WILL DOUBLE = 22 YEARS X 2 = 44 PERIODS
SOLVED USING FORMULA
jeff jeffy answered 1 month agoRelated Solutions
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