Question
1. What is the present value of a perpetuity with $100 payments beginning four years from now? The appropriate interest rate is 9 percent. 2.
1. What is the present value of a perpetuity with $100 payments beginning four years from now? The appropriate interest rate is 9 percent.
2. Crook Bank offers a savings instrument that earns 5 percent compounded quarterly for 3.5 years. If Juan places $5000 into this investment, what will be the value of the account at maturity?
3. Chad purchased a share of stock fifty years ago for $10. The stock has returned 20 percent compounded annually even though it has not extended any dividends during this period. If this information is true, the share price is closest to:
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Public Finance and Public Policy
Authors: Jonathan Gruber
4th edition
1429278455, 978-1429278454
