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You have been offered an investment that will pay you a lump sum of $30,000 25...

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Finance

You have been offered an investment that will pay you a lump sumof $30,000 25 years from today, along with a payment of $1,000 peryear for 25 years starting one year from today. How much are youwilling to invest today to have this investment in your portfolioassuming you wish to earn a rate of 6 percent compoundedannually?

Round the answer to the nearest whole number.

Answer & Explanation Solved by verified expert
4.4 Ratings (698 Votes)
We need to calculate the present value of payments of 1000 per year and 30000 after 25 years The cash inflows of 1000 will be same every year so it is an annuity For calculating the present value of annuity we    See Answer
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