You found a company that might be willing to sponsor your new fleet of bikes. They have asked you to send them a proposal. You’ll still purchase the 35 new bikes 5 years from now, so the one-time sponsorship check (that you will receive immediately if they accept your proposal) can be invested at 6% until the purchase will be made. For what amount should you request in the proposal so that you can purchase the bikes in 5 years?
Your Excel file should depict the following (as always, show your work):
The amount that you will need in 5 years (F; which is cost of bikes x number of bikes you’ll need...same as above)
Interest rate (i)
Term (n, expressed in years)
TB (which you will find in Table B in Brayley & McLean p. 66)
The present value (P)- the amount you need to invest now to have enough to buy your bikes in 5 years.