Question
2. Present Value Compute the present value of a $3,000 deposit in year 2 and another $4,500 deposit at the end of year 5 using
2. Present Value Compute the present value of a $3,000 deposit in year 2 and another $4,500 deposit at the end of year 5 using 6 percent interest rate. 3. Present Value of a Perpetuity Whats the present value a bond issued by UK Treasury with par value of 1000 pound, that promised to give investor 50 pounds per year forever, if interest rate is 4 percent? 4. Present Value of an Annuity Due If the present value of an ordinary, 10-year annuity is $10,500 and interest rate is 6.5 percent. What is the present value of the same annuity due? 5. Effective Annual Rate A loan is offered with monthly payments and an 8 percent APR. Whats the loans effective annual rate (EAR)?
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