Please draw cash flow diagrams for each question!! (12 points) An investment advisor tells you that he
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Please draw cash flow diagrams for each question!!
- (12 points) An investment advisor tells you that he can sell you an annuity that will generate $400 every quarter (i.e., 3 months) for 6 years starting 3 months from the day you purchase the annuity. Use a nominal 12% per year rate, compounded quarterly.The investment advisor asks for $7,500, which includes his fee of $200. Is this a good deal for you?In other words, what is the present worth of the annuity?
- What single amount paid at the beginning of the first year is equivalent to the series of unequal payments in #1, with an interest rate of 8%?
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