Question
1.) Suppose you signed a contract for a special assignment over the next 6 years. You will be paid $11492 at the end of each
1.) Suppose you signed a contract for a special assignment over the next 6 years. You will be paid $11492 at the end of each year. If your required rate of return is 11%, what is this contract worth in today? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have reached your final answer.)
2.) You need a loan to purchase new equipment. The loan will be paid off over 8 years with payments made at the end of every quarter. If the stated annual rate is 12% and quarterly payments are 336, what is the loan amount? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have reached your final answer.)
3.) What is the most that you would pay for an investment that promises to pay $20075 a year forever with the first payment starting one year from now? Assume that your required rate of return for this investment is 24.1%. (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have reached your final answer.)
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