Question
1. a. Back when I was in college, interest rates were a lot higher than they are today. It was possible to find a savings
1. a. Back when I was in college, interest rates were a lot higher than they are today. It was possible to find a savings account that returned 6.5% per year. If compounded monthly, what would be the Equivalent Annual Rate for this account? (Report as a decimal with 4 digits of accuracy).
b. You assume that books for the next four years will cost $579 in one year, $553 in two years, $817 in three years, and $357 in four years when you really don't care anymore. At a discount rate of 5%, what is the present value of all four cash flows combined?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started