Find the purchase price of this investment opportunity

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Reference no: EM131936944

An investment opportunity has the foIlowing characteristics: payments of $10,000 wilI be made to you and invested into a fund at the beginning of each year, for the next 20 years.

These payments will earn a 7% effective annual rate, and the interest payments (paid at the end of each year) wiIl immediately be reinvested into a second account earning a 4% effective annual rate.

Find the purchase price of this investment opportunity, given that it has an annual yield of 6% over the 20-year life of the investment.

Reference no: EM131936944

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