Sarah is thinking about purchasing an investment from HiBond Investing. If she buys the investment, Sarah...

Sarah is thinking about purchasing an investment from HiBond Investing. If she buys the investment, Sarah will receive $100 every two months for five years. The first $100 payment will be made as soon as she purchases the investment. If Sarah's required rate of return is 16 percent per year, to the nearest dollar, how much should she be willing to pay for this investment? Select one: a. $1,359 b. $1,519 c. $2,102 d. $2,047 e. $1,413

Expert Solution

how much should she be willing to pay for this investment

=(100*((1-(1+(16%/6))^(-5*6))/(16%/6)))*(1+(16%/6))

=2102

jeff jeffy answered 2 years ago

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