What should you be willing to pay for investment

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Reference no: EM131817880

1. What should you be willing to pay for an investment that promises $8 per year forever, if your required return is 8% per year?

2. What should you be willing to pay for an investment that promises $50 per year over 5 years, with the first $50 received one year from today, if your required return is 10% per year?

3. What should you be willing to pay for an investment that promises $50 per year over 5 years, with the first $50 received today, if your required return is 10% per year?

4. You invest $50 per year over 10 years, with the first $50 invested one year from today, in a financial security that offers 6% return per year. What is that investment worth at the end of its 10 year life? Assume you make no withdrawals during those 10 years.

Reference no: EM131817880

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