Question
Question 1 A couple thinking about retirement decide to put aside $2,300 each year in a savings plan that earns 9% interest. In 15 years
Question 1
A couple thinking about retirement decide to put aside $2,300 each year in a savings plan that earns 9% interest. In 15 years they will receive a gift of $27,000 that also can be invested.
a) How much money will they have accumulated 30 years from now?
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Question 2
Your consulting firm will produce cash flows of $130,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 6.6%, and you anticipate inflation of about 2.6%.
a)What is the present value of your firms cash flows for years 1 through 5? b)
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