Question
1. Sirius Company wants to have $60,000 at the end of 8 years. The present value of $1, and the present value of an annuity
1. Sirius Company wants to have $60,000 at the end of 8 years. The present value of $1, and the present value of an annuity of $1 for eight periods at 10% are 0.467 and 5.335, respectively.
How much must Sirius invest today in a fund that pays 10% annually?
A. $8,000
B. $11,246
C. $28,020
D. $40,000
2. Dagwood Company needs to have $75,000 in four years. The present value of $1, and the present value of an annuity of $1 for four periods at 10% are 0.683 and 3.170, respectively.
How much must Dagwood invest today in a fund that pays 10%, compounded annually?
A. $68,182
B. $51,225
C. $23,659
D. $56,000
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