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What is the value today of a money machine that will pay $1,618.00 every six months...

What is the value today of a money machine that will pay $1,618.00 every six months for 17.00 years? Assume the first payment is made 4.00 years from today and the interest rate is 7.00%.

Answer format: Currency: Round to: 2 decimal places.

unsure if I'm doing the process right. thanks

Solutions

Expert Solution

The first payment is being made in 4 years and further every payment is being made every 6 month, so next payment would be made ta 4 and half year, 4.5 years,

we have to calculate the present value of each cash flow and add it to get the present value today


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