An investor is considering an offer to buy equity in a start-up company. The investor will not receive in cash flows from the company until 13.00 years from today. At that time he will receive 9.00 consecutive annual payments of $55,805.00. The investor wants a 29.00% return on his investment. How much can he pay today for this opportunity to receive his return?
The correct answer is $8,145.48.
The answer I got was $172,978.88
Where did I mess up?
PV=pmt/r * (1-1/(1+r)^n
55805/.29 * (1-1/1.29^9) = 172,978.88