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Assume that I am trying to borrow money from you to finance my business. Assume that I promise to repay you in three installments, one
Assume that I am trying to borrow money from you to finance my business. Assume that I promise to repay you in three installments, one payment of $5,000 to be made exactly 2 years from today, a second payment of $10,000 to be made exactly 5 years from today, and a final payment of $15,000 to be made 8 years from today. If your opportunity cost of funds is 7.5% p.a., (that is, use an interest rate of 7.5% for this question), how much should be willing to lend me today?
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