1) A SIX YEAR ANNUITY OF $8500 QUARTERLY PAYMENTS WILL BEGIN 9 YEARS FROM NOW. THE DISCOUNT...
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1) A SIX YEAR ANNUITY OF $8500 QUARTERLY PAYMENTS WILL BEGIN 9 YEARS FROM NOW. THE DISCOUNT RATE IS 9% COMPOUNDED QUARTERLY.
a. how much is the annuity worth 5 years from now?
b. how much is this annuity worth 2 years from now?
c. how much is this annuity worth today?
2) You are currently comparing two investments, both of which have up-front costs of $45,000. Investment 1 returns $75,000 in 7 years. Investment 2 returns $105,000 in 9 years. Which of these investments has a higher return?
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