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Suppose you have the opportunity to make an investment in a real estate venture that expects to pay investors $750 at the end of each
Suppose you have the opportunity to make an investment in a real estate venture that expects to pay investors $750 at the end of each month for the next eight years. You believe that a reasonable return on your investment should be 17 percent compounded monthly. (a) How much should you be willing pay for the investment? Show your calculations. (b) What will be the total sum of cash you will receive over the next eight years? (c) Why is there such a large difference between (a) and (b)?
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