You loan your friend 25000 so she can buy her first home, Ask an Expert

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You loan your friend $25,000 so she can buy her first home. The money is taken from a savings account where it was earning 5% annual compound interest. The repayment arrangement you made with your friend is $2,500 each year for the next 15 years, beginning one year from now. You plan to immediately deposit each payment back into your savings account. What is the difference in present value (PV) between keeping your money in the savings account compared to receiving 15, $2,500 payments over the next 15 years? (use a 5% discount rate)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92322013

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