Question
5. (Score=15) Agus purchases a five year financial instrument having the following features : (a) Agus receives payments of $2,000 at the end of each
5. (Score=15) Agus purchases a five year financial instrument having the following features : (a) Agus receives payments of $2,000 at the end of each year for five years. (b) These payments earn interest at an effective rate of 5% per annum. At the end of the year, this interest is REINVESTED at the effective rate of 6% per annum. Find the purchase price to Agus to produce a yield rate of 5% overall. SHOW YOUR WORK
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Business Analysis And Valuation Using Financial Statements Text And Cases
Authors: Krishna G. Palepu, Paul M. Healy, Victor Lewis Bernard, W.Gordon Filby
2nd Edition
0324015658, 9780324015652
