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Problem 5-16 a Present value of a perpetuity What is the present value of a $600 perpetuity if the interest rate is 5%? Round your

Problem 5-16a Present value of a perpetuity

What is the present value of a $600 perpetuity if the interest rate is 5%? Round your answer to the nearest cent.

$

If interest rates doubled to 10%, what would its present value be? Round your answer to the nearest cent.

$

5-16b

An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6.

A)If other investments of equal risk earn 10% annually, what is its present value? Round your answer to the nearest cent.

B)If other investments of equal risk earn 10% annually, what is its future value? Round your answer to the nearest cent.

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