What is the least will sell claim

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You have a trust fund that will pay you R1 million exactly 10 years from today. You wanat cash now, so you are considering an opportunity to sell the right to the trust fund to an investor.

Question a. What is the least you will sell your claim for if you could earn the following rates of return on similar risk investment during the 10 year perios?

1. 6%

2.9%

3. 12%

Question b. Rework part (a) under the assumption that the R1 million payment will be received in 15 rather than 10 years.

Reference no: EM132614880

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