Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1)Washington-Pacific (W-P) invests $3 million to buy a tract of land and plant some young pine trees. The trees can be harvested in 8 years,

1)Washington-Pacific (W-P) invests $3 million to buy a tract of land and plant some young pine trees. The trees can be harvested in 8 years, at which time W-P plans to sell the forest at an expected price of $6 million. What is W-P's expected rate of return? Round your answer to two decimal places. %

A mortgage company offers to lend you $85,000; the loan calls for payments of $8,964.13 at the end of each year for 30 years. What interest rate is the mortgage company charging you? Round your answer to two decimal places.

You need to accumulate $10,000. To do so, you plan to make deposits of $1,650 per year - with the first payment being made a year from today - into a bank account that pays 10.18% annual interest. Your last deposit will be less than $1,650 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal? Round your answer up to the nearest whole number. year(s)

How large will the last deposit be? Round your answer to the nearest cent. $

Present Value of a Perpetuity

What is the present value of a perpetuity of $100 per year if the appropriate discount rate is 4.22%? Round your answer to the nearest cent. $

If interest rates in general were to double and the appropriate discount rate rose to 8.44%, what would its present value be? Round your answer to the nearest cent. $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance

Authors: Richard W. Tresch

4th Edition

0128228644, 978-0128228647

More Books

Students also viewed these Finance questions