MGMT350 Handout 4 1. Henrik got paid $3,000 a month ago from an endorsement deal. The deal states he will get an additional $4,000 today and $5,000 a month from now. Because Henrik is a great guy, he has pledged to give half of the total cash flows to charity (the payment to charity will be one month from today). Assuming a monthly interest rate of 0.5%, what are Henrik's net earnings in today's dollars? Draw a timeline: Calculations: 2. You are receiving $2,000 at the end of each quarter for the next three years. At the end of the three years, you will pay back $30,000. What is the implied annual interest rate? PV: FV - N : PMT- 3. Daniel hears about Henrik's plans and sets up an investment fund where he will deposit $5,000 at the start of each month for one year (lump sum paid to charity at the end of the year). Assuming a Ja-4% environment, how much will Daniel donate? Draw a timeline: Calculations