Question
1A. Find the arithmetic sum of all payments (as an accountant might do), of the following annuity stream which makes annual payments, and never ends.
1A. Find the arithmetic sum of all payments (as an accountant might do), of the following annuity stream which makes annual payments, and never ends.
The first cash flow of $51 is received 8 years from today. Thereafter, the cash flows shrink at an annual rate of -5.7% per year, and continue forever.
If you believe the answer is infinity, then enter 9999.9999 as your answer.
If you believe the answer is impossible to determine, then enter 8888.8888 as your answer.
Otherwise, enter your answer as a positive value using at least 4 significant digits.
1B) Youre about to purchase a car. The purchase price is $23,879, and you have decided to make an immediate down payment toward the purchase of $1,772. You will finance (i.e. borrow) the remainder of the purchase price from a local bank.
The bank is offering an interest rate of 6.0% APR with monthly payments. There will be no payments due for a few months. The first payment is due 4 months from today. The last payment is due 71 months from today. The payments will increase in size by 2.4% per month.
How big is the 14th payment?
Enter your answer as a positive value using at least 4 significant digits.
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