Question
1. An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at
1. An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 10% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent.
2. Find the present value of $800 due in the future under each of these conditions:
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6% nominal rate, semiannual compounding, discounted back 9 years. Do not round intermediate calculations. Round your answer to the nearest cent. $
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6% nominal rate, quarterly compounding, discounted back 9 years. Do not round intermediate calculations. Round your answer to the nearest cent. $
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6% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent. $
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Why do the differences in the PVs occur?
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