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Offer to buy equity in a start-up company

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Reference no: EM131829372

An investor is considering an offer to buy equity in a start-up company. The investor will not receive in cash flows from the company until 13.00 years from today. At that time he will receive 9.00 consecutive annual payments of $55,805.00. The investor wants a 29.00% return on his investment. How much can he pay today for this opportunity to receive his return?

The correct answer is $8,145.48.

The answer I got was $172,978.88

Where did I mess up?

PV=pmt/r * (1-1/(1+r)^n

55805/.29 * (1-1/1.29^9) = 172,978.88

Reference no: EM131829372

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