Question
Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would allow him to receive 13 end-of-yearpayments starting one year
Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would allow him to receive 13 end-of-yearpayments starting one year from now. The first two payments would be $27,000 and $23,000 in one and two years respectively, and then $19,000 per year after that for 11 years. If Wally assumes a discount rate of 10.7%, what is the present value of this stream of cash flows?
Suppose your credit card balance is $18,000. The minimum payment is $339.55. The annual interest rate is 19.3% and interest is calculated monthly. If you just make the minimum monthly payment ($339.55) every month, how much total interest will you pay by the time you pay off your debt?
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