If Raymond has an investment offer to invest a lump sum of money now and then receive $3,500 every 6 months. What is such investment has to be made now if interest is 8% compounded quarterly and the payments of $3,500 will be:

1. At the end of every 6 months for 15 years?(5)
2. At the beginning of every 6 months for 10 years?(4)
3. At the end of every 6 months for 8 years but deferred for 4 years?(4)
4. At the beginning of every 6 months or 9 years but deferred for 3 years?(4)
5. At the beginning of every 6 months in perpetuity?(3)

Answer rating: 100% (QA)

To calculate the present value of the investment in each scenario we will use the formula for the present value of an annuity PV PMT 1 1 rn r Where PV ... View the full answer