Question
Zacis looking to buy a fixed interest investment.He has found one that pays interest of$250each year(fixed)for4years.If the current interest rates for a similarinvestment are6%per annum(compounding
Zacis looking to buy a fixed interest investment.He has found one that pays interest of$250each year(fixed)for4years.If the current interest rates for a similarinvestment are6%per annum(compounding annually),whatis themaximum amountZacshould pay for this investment?
Hint:calculate thepresent valueof this investment.
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Financial Management Principles and Application
Authors: Arthur J. Keown, J. William Petty, David F. Scott, Jr.
10th edition
536514119, 536514110, 978-0536514110
