Question
Please help me understand how to solve these questions 1. Your cousin has just invested in a consul bond that promises to pay $200 per
Please help me understand how to solve these questions
1. Your cousin has just invested in a consul bond that promises to pay $200 per year into perpetuity. She would like to know the final ending value of the bond.
2. Find the compound value of a $125, ten-yearordinary annuity at 6 percent annual interest if the payment at the end of year 6 is omitted.
3. A father is planning to provide a 20-year trust fund for his son Dominic. The amount deposited today will remain untouched until the end of the 20th year, but will gain interest at a rate of 8 percent compounded annually. The money will then be transferred to another account, which pays 6 percent. The intent is that Dominic will withdraw the money in six equal annual payments of $4,000 each beginning at the end of year 20. The fund, which will help to pay for his higher education will be completely depleted after six payments. What amount should Dominic's father deposit today?
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