Question
1a. Assume that starting next year, you will receive payments of $ 450 every year for 9 years. The discount rate it 6 %. What
1a. Assume that starting next year, you will receive payments of $ 450 every year for 9 years. The discount rate it 6 %. What is the present value of these payments?
1b. It is now the beginning of the year. Assume that, starting at the end of the year, you will make deposits of $854 each year into a savings account. You will make a total of 10 annual deposits. If the savings account interest rate is 14%, how much money will you have at the end of year 10?
1c. Assume that you wish to make annual deposits into a savings account. The interest rate offered by the bank is 13%, and you plan to save for the next 8 years. If your goal is for the present value of your savings to be equal to $2,364, how much money must you deposit every year?
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