You will get $450,000 from your rich uncle Jim in 15 years. The discount rate and...
You will get $450,000 from your rich uncle Jim in 15 years. The discount rate and the interest rate are 2%/year, compounded annually. What is the present value of this gift from your uncle.
1. $330,356.63
2. $331,356.63
3. $332,256.63
4. $333,256.63
5. $334,356.63
The retirement benefit program from your employer will send you 240 monthly checks of $5,000 after you retire. The first check will be a month from your retirement. The interest and discount rates are 0.2%/month, compounded monthly. If you retire today, then what is the present value of this benefit program?
1. $925,299.80
2. $940,299.80
3. $949,299.80
4. $952,299.80
5. $955,299.80
Homework Answers
The solution to the given question is :
1.
Option 5)
=450000/1.02^15=334356.6285
2.
Option 4)
=5000/0.2%*(1-1/1.002^240)=952299.7912
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