What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years, if the opportunity cost of using funds is 8 percent?

QUESTION POSTED AT 01/06/2020 - 01:57 PM

Answered by admin AT 01/06/2020 - 01:57 PM

To get the maximum amount of this asset we shall use the formula:
 A=future amount
p=principle amount
from the question: p=$250000, r=8%,n=5
A=$ 319,070.40
Thus, we conclude that at the end of 5 years the amount generated will be $319,070.40
Post your answer

Related questions

How do years of teaching add to teacher payments?

QUESTION POSTED AT 02/06/2020 - 01:12 AM

The amount you owe in state income is based on

QUESTION POSTED AT 01/06/2020 - 12:01 PM

What effect would a tax increase have on income

QUESTION POSTED AT 29/05/2020 - 04:19 PM