How much should he be willing to accept on graduation day

Assignment Help Financial Management

Reference no: EM131600481

Terry's father loaned her $15,000 for college expenses. Terry agreed to repay the $15,000 in a lump sum 5 years after graduation. No interest was to be charged. Terry, who is now a senior, has the prospects of marrying a rather wealthy man and wishes to repay the loan on graduation day. Assuming that father can invest the money at 12% interest, how much should he be willing to accept on graduation day rather than waiting 5 years for his money? Show your work.

Reference no: EM131600481

Questions Cloud

Tomorrow marketing trends : What can the organization do today to better prepare itself for tomorrow's marketing trends?

What is an estimate of brandtly price per share : Brandtly Industries invests a large sum of money in R&D; What is the firm's horizon, or continuing, value? What is an estimate of Brandtly's price per share?

What was the basic principle of the duke : Which of the following is a primary issue for incarcerated juveniles, The new substantive rights include all EXCEPT

Discuss about the pairs of goods : Which of the pairs of goods above is likely to be nearly perfect substitutes and which likely to be nearly perfect complements? Explain.

How much should he be willing to accept on graduation day : Terry's father loaned her $15,000 for college expenses. how much should he be willing to accept on graduation day rather than waiting 5 years for his money?

What type of slope do you think an indifference curve have : If we measure "goods" on each axis, is an indifference curve positively (upward) sloped or negatively (downward) sloped? Why?

Learning experience more effective and meaningful : Finally, consider how active learning strategies could have been used, or used differently, to make the learning experience more effective and meaningful.

Who are stakeholders in rule-making in case of visa holders : Who are the stakeholders in rule-making in the case of visa holders; what is the nature of the rules that apply to visa holders as employees

Valuation of a constant growth stock : What is the equity cost of capital after financing? What is the Company’s weighted average cost of capital after new financing?

User Account

All Pages