Question
1) A car dealership offers you no money down on a new car. You may pay for the car for 5 years by equal monthly
1) A car dealership offers you no money down on a new car. You may pay for the car for 5 years by equal monthly end-of-the-month payments of $730 each, with the first payment to be made one month from today. If the discount annual rate is 5.19 percent compounded monthly, what is the present value of the car payments?
2) You have just purchased an investment that generates the cash flows shown below for the next four years. You are able reinvest these cash flows at 4.98 percent, compounded annually. How much is this investment worth at the end of year four?
End of year
- $168
- $1,190
- $565
- $164
Round the answer to two decimal places.
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