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4. You have decided to invest $920 into a savings account which pays an annual interest rate of 8%. What is the value of the
4. You have decided to invest $920 into a savings account which pays an annual interest rate of 8%. What is the value of the savings account in 16 years?
8. John is buying a security that will pay $110 each year for the next 10 years. He is thinking about selling the security in 6 years. What price does John think he can sell the security for, if he believes the interest rate will be 9% in 6 years?
10. A Consol (perpetuity) will start paying $140 at the end of 5 years. What is the value of the consol today if the discount rate is 7%?
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