Interest compounded semiannually

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Reference no: EM132069062

1. Paul Havlik promised his grandson Jamie that he would give him $7,900 7 years from today for graduating from high school. Assume money is worth 10% interest compounded semiannually. What is the present value of this $7,900? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.)

2. Using NPV to evaluate an investment that costs $77,500 and is expected to pay $29,940 a year for 4 years, should the financial decision maker accept the project if the required rate of return is 10% ?

Reference no: EM132069062

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