Suppose you receive $180 at the end of each year for the next three years. a. If

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Suppose you receive $180 at the end of each year for the next three years.

a. If the interest rate is 9%, what is the present value of these cash flows?

b. What is the future value in three years of the present value you computed in (a)?

c. Suppose you deposit the cash flows in a bank account that pays 9% interest per year. What is the balance in the account at the end of each of the next three years

(after your deposit is made)? How does the final bank balance compare with your answer in (b)?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Question Posted: Feb 27, 2024 03:07 AM

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Suppose you receive $180 at the end of each year for the next three years. a. If

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Solving the Annuity Problems a Present Value PV Calculation We can use the present value of an annui...View the full answer

Fundamentals Of Corporate Finance

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