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You are considereding an investment that promises to make 10 payments of $5000. The payments will...

You are considereding an investment that promises to make 10 payments of $5000. The payments will be made every two years. The only twist is that the first payment will be received in one year. If you required a return of 10% per year compounded semi-annually, how much would you be willing to pay for this investment? (using casio fx-9750GII)

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Answer #1

Given Rate is 10% per anum

If required compounding semi annually, 5% perr six months shall be considered as discounting factor

Value of Investment = PV of Cash flows arising from it.

PVF = 1/(1.05)^ Period

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