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What is the present value of an investment

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Reference no: EM133068169

Suppose the term structure of? risk-free interest rates is shown below.

Term

1 year

2 years

3 years

5 years

7 years

10 years

20 years

Rate? (EAR, %)

2.06

2.51

2.85

3.42

3.78

4.03

4.91

What is the present value of an investment that pays ?$200 at the end of each of years? 1, 2, and? 3? If you wanted to value this investment correctly using the annuity?formula, which discount rate should you? use?

To value this investment correctly using the annuity? formula, use the discount rate ________ ?(Round to five decimal? places.)

Reference no: EM133068169

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