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6. What is the Present Value of an annual perpetuity of $20,000 assuming a discount rate of 4.2% ? a) $476,190.48 b) $381,335.58 c) $293,878.11
6. What is the Present Value of an annual perpetuity of $20,000 assuming a discount rate of 4.2% ? a) $476,190.48 b) $381,335.58 c) $293,878.11 d) $239,186.78 7. What is the Effective Annual Rate of an interest rate with a nominal annual rate of 6.5% if compounded monthly? a) 6.73% b) 6.70% c) 6.95% d) 6.50% 8. Your friend has just won the lottery. They have a choice of receiving $250,000 a year for 40 years or a lump sum of $5m. Which is the better alternative assuming a discount rate of 4.25% ? a) Lump Sum of $5,000,000 b) Annual payment of $250,000 c) They are equivalent
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