Problem $3-9$

Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year $1,$$$14,000$; year $2,$

$$11,500$; year $3,$$$9,000$; year $4,$$$6,500$; year $5,$$$4,000$; year $6,$$$0$; and year $7,$$$14,000.$ Walt believes that he should earn $12$ percent

compounded annually on this investment.

Required:

a$.$ How much should he pay for this investment?

b$.$ How much should he pay if he expects to earn an annual return of $9$ percent compounded monthly?

a$.$ Value of investment at $12\%$

b$.$ Value of investment at $9\%$