How much should you pay for the investment

Assignment Help Financial Management

Reference no: EM131327422

1. Assuming that these amounts will be compounded at an annual rate of 15 percent, how much will you have on deposit at the end of five years?

2. Suppose you have the opportunity to make an investment in a real estate venture that expects to pay investors $750 at the end of each month for the next eight years. You believe that a reasonable return on your investment should be an annual rate of 15 percent compounded monthly.

a. How much should you pay for the investment?

b. What will be the total sum of cash you will receive over the next eight years?

c. What do we call the difference between (a) and (b)?

Reference no: EM131327422

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