Question

15. aFind the present values of the following cash flow streams at a 6% discount rate. Do not round intermediate calculations. Round your answers to the nearest cent.

0

1

2

3

4

5

Stream A	$0	$100	$450	$450	$450	$300
Stream B	$0	$300	$450	$450	$450	$100

Stream A: $  

Stream B: $  

1. What are the PVs of the streams at a 0% discount rate? Round your answers to the nearest dollar.

   Stream A: $  

   Stream B: $  

19. Six years from today you need $10,000. You plan to deposit $1,600 annually, with the first payment to be made a year from today, in an account that pays a 6% effective annual rate. Your last deposit, which will occur at the end of Year 6, will be for less than $1,600 if less is needed to reach $10,000. How large will your last payment be? Do not round intermediate calculations. Round your answer to the nearest cent.

$  

20. Simon recently received a credit card with a 12% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $370.44. The minimum payment on the card is only $20 per month.

1. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number.

     month(s)

2. If Simon makes monthly payments of $65, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest whole number.

     month(s)

3. How much more in total payments will Simon make under the $20-a-month plan than under the $65-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

Answer 1

15)

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