Land owner receives annual royalty payment

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Reference no: EM13729629

Suppose that a land owner receives annual royalty payment of $2000 at the end of first year, $2200 at the end of second year, $1900 at the end of third year, $2500 at the end of forth year, and $1500 at the end of fifth year.

a. Calculate the future value of these payments at the end of fifth year at an annual interest rate of 8%.

b. If 1/12 of each of the royalty payments were received monthly, calculate the present value of these payment at a nominal annual interest (discount) rate of 8%.

Reference no: EM13729629

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