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What is the capital value

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Reference no: EM132913517

Question - Please show steps of the calculation of the following question: An investment on 1st January year 1 has expected receipts of on 31st December of each year of €900 for 4 years.

The time value of money is 8%. What is the capital value as at 1st January for year 3 if it is discovered at that point in time that the expected receipt for year 4 will be €1,000? Use an ex-ante approach in your calculations.

a. €1,434

b. €1,449

c. €1,486

d. €1,507

Reference no: EM132913517

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