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Please Answer all 8) The government imposed a fine on the Not-So-Legal Company. The fine calls for a payment of $100,000 today, $150,000 one year
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8) The government imposed a fine on the Not-So-Legal Company. The fine calls for a payment of $100,000 today, $150,000 one year from today, and $200,000 two years from today. The government will hold the funds until the final payment is collected and then donate the entire amount to charity. The government has agreed to pay an annual interest of 3 percent on the held funds. How much will be donated to charity in two years? 9) What price should I pay today for an investment that will provide a single payment of $120,000 in four years. I wish to earn a return of 8% on my investments. 10) For an investment today in the amount of $16,934, I will receive $30,000 in six years. Determine the approximate rate of interest I will earn over that period, assuming that interest is compounded annually. 11) How many years will it take to accumulate $20,000 if I invest a lump sum of $2,031 and earn interest at 10% compounded annually? 12) My usual cost of borrowing is 12%. I have an option to lease equipment for the next three years for a monthly lease payment of $250. The first payment would be made today. What is the present value of this series of payments. 13) A bond is purchased on January 1, 2013. The bond provides payments of $4,000 on June 30 and December 31 of each year, and a lump sum payment of $100,000 on December 31,2017 . Determine the price that should be paid for the bond if a 10% rate of return is required. 14) What is the future value of the following cash flows at the end of year 3 if the interest rate is 6% ? The cash flows occur at the end of each year. 15) Beatrice invests $1,000 in an account that pays 4% simple interest. How much more could she have earned over a five-year period if the interest had compounded annuallyStep by Step Solution
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