Julie is also considering a small, short-term investment. In exchange for investing $10,000 today, she will receive a payment of $1,250 every year for five years. At the end of the five years, she will also receive a lump sum of $5,000. This means that at the end of the five years, Julies $10,000 investment will return a total of $11,250. Is this a good opportunity?

On the Investment worksheet, in cell C13, use the appropriate function to calculate the present value of the proposed investments future payout to determine if the investment is worth the money. In your calculation, use the alternative guaranteed interest rate that Julie would be giving up if she were to choose this investment opportunity over a no-risk savings account.

Investment Details Investment Opportunity Original values ($10,000.00) 5 $1,250.00 Initial Investment ($10,000.00) Years 5 Annual Investment Payout $1,250.00 Investment Payout at the end of 5 years $5,000.00 Alternative Guaranteed Rate* 3.5% *This is the guaranteed rate that you would "give up" or forgo if you were to choose this investment. $5,000.00 3.5% Present Value Investment Timeline $10,000 $1,250 $1,250 $1,250 $1,250 + + $1,250 + $5,000 + 0 1 2 3 4 5