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How much should he pay for this investment

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Reference no: EM133141473

Question - Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year 1, $13,100; year 2, $10,600; year 3, $8,100; year 4, $5,600; year 5, $3,100; year 6, $0; and year 7, $13,100. Walt believes that he should earn 12 percent compounded annually on this investment.

Required -

a. How much should he pay for this investment?

b. How much should he pay if he expects to earn an annual return of 9 percent compounded monthly?

Reference no: EM133141473

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