Question: Under the old CEO, Gregirich Factors, Inc. made a loan to a supplier. The contract specifies that the supplier will begin paying Gregirich $48034 at the end of year 7, increasing the amount by 24% each subsequent year. The supplier will make a total of 10 payments (one each year) .
The new CEO has asked you to calculate the present value of the payments to be sure Gregirich will receive the full amount of the loan. The new CEO is a little suspicious. Use a nominal annual interest rate of 8%, compounded quarterly.