Question
You have an investment with 10 semi-annual cash flows of $1000. The first payment is 6 months from today. If the EAR is 11% what is the present value of this investment?
Answers
Reiny
Don't know what EAR is, but I will assume your rate is 11% per annum compounded semi-annually
i = .11/2 = .055
PV = 1000(1 - 1.055^-10)/.055
= 7537.63
i = .11/2 = .055
PV = 1000(1 - 1.055^-10)/.055
= 7537.63