Answer:
Explanation:
the minimun value is expressed by the present value of the investment using a 7% rate, lets recall the formula for finding present values:
[tex]PV=FV*(1+i)^{-n}[/tex]
where, PV is present value, FV is the future value, and n is time elapsed. So applying to this problem we have:
[tex]PV=10,000*(1+0.07)^{-10}[/tex]
[tex]PV=5,083.49[/tex]
So the minimun value which is profitable to pay is 5,083.49 today, in that sense you will get a return on 7% compounded after 10 years
