Question

An investment will pay $1,200 per quarter for 15 years. You require a return of 12 percent, compounded quarterly, for this type of investment. How much is this investment worth to you today

Answer 1

Answer:

$33,210.68

Explanation:

Calculation for How much is this investment worth to you today

Present Value = $1,200({1 – 1 / [1 + (0.12 / 4)]^15×4} / (0.12 / 4))

Present Value=$1,200({1 – 1 / [1 + (0.03)]^60} / (0.03))

Present Value=$1,200({1 – 1 / [1.03]^60} / (0.03))

Present value= $33,210.68

Therefore the amount the investment will worth to you today is $33,210.68