You own a thriving restaurant but want to change careers. Your brother offers to buy the business with the following monthly payments: $2,750 at the end of each month for 4 years, followed by $3,000 at the end of each month for 3 years. Assuming that you can earn 9% compounded monthly, what is the equivalent cash price of your brother’s offer? (NPV)

Question

You own a thriving restaurant but want to change careers.  Your brother offers to buy the business with the following monthly payments:  $2,750 at the end of each month for 4 years, followed by $3,000 at the end of each month for 3 years.  Assuming that you can earn 9% compounded monthly, what is the equivalent cash price of your brother’s offer?  (NPV)