Homework Answers
This series can be broken down into two:
Series 1: Constant payments of 17
Series 2: Arithemtic Gradient of 5
and Cash flow of -5 at time 0
Present Value=-5+17/r+5/r^2
Given,
1/(1+EAR)^4=0.80
rate compounded once in four years r=(1+EAR)^4-1=1/0.80-1=25.00%
Present Value=-5+17/(1+r)+5/r^2=-5+17/(25%)+5/(25%)^2=143
the possible answers are 120,140,160,180,200 19. An annuity pays 12 at time 0, 17 at time...
the possible answers are 120,140,160,180,200
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Score: 0 of 1 pt 3 of 20 (11 complete) Problem 5-4 (similar to) Present value)...
Score: 0 of 1 pt 3 of 20 (11 complete) Problem 5-4 (similar to) Present value) What is the present value of the following future amounts? a. $700 to be receved 10 years from now discounted back to the present at 11 percent b. $300 to be received 8 years from now discounted back to the present at 8 percent c. $1,050 to be received 12 years trom now discounted back to the present at 5 percent d. $1,050 to...
the possible answers are 120,140,160,180,200
19. An annuity pays 12 at time 0, 17 at time 4, 22 at time 8, and so on forever. Determine the present value of the payments if the present value of a payment of 1 payable four years from now is 0.80.
V 3 4 5 6 Case Study #2 7 8 9 10 - 11 12 13 Early in the year 2005, the owner of a building made a lessee an offer. The lease contract has four more years to run, and the rent is to be increased by 10% a year each year over the preceding year. The rent is payable in equal monthly installments but (for the sake of simplicity) assume it is all paid at year-end. The building...
22. You are head of the Schwartz Family Endowment for the Arts. Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the San Francisco Bay area in perpetuity. Every seven years, uity. Every seven years, you will give the school $6.5 million. The first payment will occur seven years from to 5% per year compounded annually, what is the time t=0 present value of payment will occur seven years from today. If the interest...
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