Determining the deal for corporal moneymaker

Reference no: EM131796578

Question: At a military base in Texas, Corporal Stan Moneymaker has been offered a wonderful savings plan. These are the salesperson's words: "During your 44-month tour of duty, you will invest $195 per month for the first 41 months. We will make the 42th, 43th, and 44th payments of $195 each for you. When you leave the service, we will pay you $9,000 cash." Is this a good deal for Corporal Moneymaker? Use the IRR method in developing your answer. Stan makes the assumption that the investment firm will pay him $9,000 when he leaves the service at the end of 44 months? (i.e., there is little risk involved).

Reference no: EM131796578

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