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Please help The following parts of the question are not related. (a) You have the opportunity to buy a term deposit for $1,000. which will
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The following parts of the question are not related. (a) You have the opportunity to buy a term deposit for $1,000. which will pay no interest during its 10-year life and have a value of $3, 106 at maturity. What rate of return does this term deposit pay? (b) Son-Nan Chu wants to borrow $20,000 and agrees to repay this sum in equal quarterly payments over 10 years. If the cost of borrowing is 12%. what is the quarterly payment? (c) In 10 years you are planning on retiring and buying a house in Florida. The house you are thinking about costs $100,000 and is expected to increase in value each year at a rate of 5%. Assuming you can earn 10% annually on your investments, how much must you invest at the end of each year in order to buy your house when you retire? (d) After reviewing the various personal loan rates available to you, you find you can borrow from a finance company at 11.5%, compounded weekly, or from a bank at 12.5%, compounded monthly. Which option is most attractive? You are comparing a perpetuity with annual payments of $5,000 with a 20-year annuity having the same payments. The market rate of interest for these instruments is 1%. How much more is the perpetuity worthStep by Step Solution
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