Question

according to an investment proposal, an initial investment of 100000 is expected to yield a uniform income stream of 10000 per annum. if money is worth 8% per annum compounded continuously, what is the expected pay back period, i.e. after what time the initial investment will be recovered?​

Answer 1

Answer:

My handwriting is not good but I hope it will be help full for you

Answer 2

Step-by-step explanation:

step 1st:-

value= 1,00,000

annual value= 10,000

final value= 10,000*pvfa of (8%,n)

1,00,000= 10,000*pvfa of (8%,n)

1,00,000/10000= pvfa of (8%,n)

10= pvfa of (8%,n)

step 2nd:-

We need to find the value of around 10 in pvfa table in the line of 8%

at 20= we have a value of 9.819 n we call it approx 10 as well

hence, the answer is 20 years.