In the above how did the author arrive at 6.275 million. I understand that the adjusted discount rate of (1.061/1.02)-1= 4.019% and N will be 25 years. However the answer I am arriving at is 7.79 million.
Can someone please show the calculation of how it is arrived at? @S2000magician @Greybeard_The_Elder
Thanks in advance.
Anyone with any explanation?
I do not know. I get the same number as you.
8.1% gives $6,275,000ish.
8.1 is not given.
Aren’t we supposed to use adjusted discount rate?
How did you arrive at the figure using 8.1 can you share a detailed calculation please?
I just stuck it in Excel and solved for the rate that corresponds to a 6.275 million initial investment.
I understand that 8.1% is not given. That’s how I arrived at “I do not know” as my original answer.
