Question
please reply if you can answer all the questions. 1. What is the present value of a 15-year annuity that pays $50 per year, assuming
please reply if you can answer all the questions.
1. What is the present value of a 15-year annuity that pays $50 per year, assuming 12% annual interest rate ? _________
2. Assume you currently have $4,000. If you deposit this money in a bank account at an annual interest rate of 2.5%, and in addition deposit $500 at the end of each year for the next 7 years, how much will you have in the account after 7 years? ___________________________
3. What is the present value of receiving $500 per year forever, assuming 6% interest rate? ____________________
4. Assume you deposit $600 in an account, and that in 6 years you have $900. Assuming daily compounding frequency what is the quoted annual interest rate associated with the account? Avoid rounding until the final answer! ______________________________________
5. How many years would it take for a $100 deposit to grow to $200 at a 5% quoted annual interest rate, under monthly compounding? _____________________________________
6. Assume the annual periodic rate is equal to 14.00%, and that the compounding frequency is daily. What is the corresponding effective annual rate equal to?___________________________
please reply if you can answer all the questions.
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