Question
Problem 5-16 Compound Interest (LO1, 2) Investments in the stock market have increased at an average compound rate of about 5% per year since
Problem 5-16 Compound Interest (LO1, 2) Investments in the stock market have increased at an average compound rate of about 5% per year since 1900. Assume that cash flows occur at the end of each year. a. If you invested $1,000 in the stock market in 1900, how much would that investment be worth in 2011? (Round your answer to the nearest cent.) Investment value in 2011 b. If your investment in 1900 has grown to $1 million in 2011, how much did you invest in 1900? (Round your answer to the nearest cent.) Investment value in 1900 Problem 5-28 Annuity and Annuity Due Payments (LO3) a. If you borrow $1,000 and agree to repay the loan in five equal annual payments at an interest rate of 12%, what will your payment be? (Round your answer to the nearest cent.) PMT $ b. If you make the first payment on the loan immediately instead of at the end of the first year, what is your payment? (Round your answer to the nearest cent.) PMT
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