How much should he pay today for the annual membership

Assignment Help Financial Management

Reference no: EM132032448

Trey just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $55, due at the beginning of each month or in one payment today.

If the appropriate interest rate is 8%, how much should he pay today for the annual membership?

Reference no: EM132032448

Questions Cloud

What is the gain from the acquisition : You estimate that investors currently expect a steady growth of about 7% in Plastitoys's earnings and dividends.

Estimate the bonds yield to maturity : A Treasury bond that settles on August 10, 2013, matures on October 17, 2019. The coupon rate is 6.10 percent and the quoted price is 112:9.

What would be the value of the investment if the money is : The treasurer of a major U.S. firm has $35 million to invest for three months. The interest rate in the United States is .23 percent per month.

What is the yield on a bank discount basis : If a treasury note with 180-day maturity and $1 million face value is currently at $899,000. What is the yield on a bank discount basis?

How much should he pay today for the annual membership : If the appropriate interest rate is 8%, how much should he pay today for the annual membership?

What is the approximate and the exact real rate of interest : If Treasury bills are currently paying 6.4 percent and the inflation rate is 1.5 percent, what is the approximate and the exact real rate of interest?

Will john invest in the risky portfolio : Treasury bills pay 1% per year and the risky portfolio has a risk premium of 5% and standard deviation of 15%. John's risk aversion is less than 2.22.

Will the acquisition have on the firm cost of equity capital : Trendsetters has a cost of equity of 14.6 percent. The market risk premium is 8.4 percent and the risk-free rate is 3.9 percent.

Evaluate the risk premium on the market : The Treasury bill rate is 4.1%, and the expected return on the market portfolio is 10.7%. Use the capital asset pricing model.

User Account

All Pages