Question
7. Theo has an investment worth 288,599 dollars. The investment will make a special payment of X dollars to Theo in 6 month(s) and the
7. Theo has an investment worth 288,599 dollars. The investment will make a special payment of X dollars to Theo in 6 month(s) and the investment also will make regular, fixed monthly payments of 3,660 dollars to Theo forever. The expected return for the investment is 1.34 percent per month and the first regular, fixed monthly payment of 3,660 dollars will be made to Theo in 1 month. What is X, the amount of the special payment that will be made to Theo in 6 month(s)?
9. An investment, which has an expected return of 13.53 percent, is expected to make annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate of 5.6 percent per year. The cash flow in 1 year from today is expected to be 45,210 dollars. What is the present value (as of today) of the cash flow that is expected to be made in 3 years?
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