Question
1. You have a partnership stake in a business that pays you equal payments of $1,500 at the end of each year for the next
1.
You have a partnership stake in a business that pays you equal payments of $1,500 at the end of each year for the next ten years. If the annual interest rate stays constant at 9%, what is the value of these payments in todays dollars? Round your answer to the nearest whole dollar.
(a)$10,493
(b)$8,183
(c)$12,034
(d)$9,627
2.
You found out that now you are going to receive payments of $6,500 for the next 11 years. You will receive these payments at the beginning of each year. The annual interest rate will remain constant at 13%. What is the present value of these payments? Round your answer to the nearest whole dollar.
(a)$56,390
(b)$33,416
(c)$41,770
(d)$36,965
3.
Your goal is to have $7,500 in your bank account by the end of 10 years. If the interest rate remains constant at 9% and you want to make annual identical deposits, how much will you need to deposit in your account at the end of each year to reach your goal? (Note: Round your answer for PMT to two decimal places.)
(a)$345.55
(b)$493.65
(c)$543.02
(d)$592.38
4.
If your deposits were made at the beginning of each year rather than an at the end, by how much would the amount of your deposit change if you still wanted to reach your goal by the end of 10 years? (Note: Round your answer for PMT to two decimal places.)
(a)$55.03
(b)$40.76
(c)$50.95
(d)$38.72
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