What the investor should pay for the mortgage instrument

Reference no: EM13279442

A mortgage instrument pays $1.5 million at the end of each of the next two years. An investor has an alternative investment with the same amount of risk that will pay interest at 8% compounded annually. Which of the following amounts is closest to what the investor should pay for the mortgage instrument? Answer $1.286 million. $1.388 million. $2.675 million. $2.723 million. My calculator doesn't work with numbers this big.

Reference no: EM13279442

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