Q9

LO 4 9. Calculating the Number of Periods You're trying to save to buy a new $175,000 Ferrari. You have $35,000 today that can be invested at your bank. The bank pays 2.9 percent annual interest on its accounts. How long will it be before you have enough to buy the car? 10. Calculating Present Values Imprudential, Inc., has an unfunded pension liability of $645 million that must be paid in 25 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 5.5 percent, what is the present value of this liability? LO 2 1