How much should he pay for the investment

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Reference no: EM131327414

Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year l, $12,500; year 2, $10,000; year 3, $7,500; year 4, $5,000; year 5, $2,500; year 6, $0; and year 7, $12,500.

Walt believes that he should earn 12 percent compounded annually on this investment. How much should he pay for this investment?

What if he expects to earn an annual return of 9 percent compounded monthly? How much should he pay?

Reference no: EM131327414

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