Question
PLease show work, I really need help understanding these. The way they are worded always trips me up. I need to provide what PMT ,
PLease show work, I really need help understanding these. The way they are worded always trips me up. I need to provide what PMT , PV, FV, I/R , and # payments (N)
1) What is the value today of a money machine that will pay $100 per year for 5 years? Assume the first payment is made one year from today and interest rate is 7%
2) You will deposit $200 per year for 10 years into an account that earns 5%. The first deposit is made next year. How much will be in the account 10 years from today?
3) If you are willing to pay $2,000 today to receive $100 per year forever, then your required rate of return must be______%. Assume the 1st payment is received one year from today.
4) Value today of receiving $500 per year forever? Assume the 1st payment is made 3 years from today, and interest rate is 10%.
5) value today of an account that will pay $100 every 6 months for 10 years? Assume the 1st payment is made two year from today and the annual interest rate is 8%
(Bonus) You have $1,000 in your account today. And you will deposit $200 per year for 10 years into the account that earns 5%. The first deposit is made next year. How much will be in the account 15 years from today?
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