Question
1. You are expecting to receive the following payments: $2,000 in year 4, $8,000 in year 8. What is the present value of the two
1. You are expecting to receive the following payments: $2,000 in year 4, $8,000 in year 8. What is the present value of the two payments today, if the interest rate is 5%?
2. Assume you wish to accumulate $100,000 in year 8. You plan to deposit $20,000 today in a bank that guarantees an interest rate of 12%. What additional amount will you have to put in year 5 to achieve this target?
3. You deposited $3,000 in a bank ten years ago. The balance on your account is currently showing $7,102.09. What interest rate did the bank pay on your deposit?
4. You deposit $5,000 in bank today . What is the future value of the sum in year 10 if the interest rate is 6% in years 1-5 and 8% in years 6-10?
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