# Question: For the following questions assume an end of year cash flow of

For the following questions, assume an end-of-year cash flow of $250 and a 10% discount rate.

a. What is the present value of a single cash flow?

b. What is the present value of a 5-year annuity?

c. What is the present value of a 10-year annuity?

d. What is the present value of a 100-year annuity?

e. What is the present value of a $250 perpetuity?

f. Do you detect a relationship between the number of periods of an annuity and its resemblance to a perpetuity? Explain.

a. What is the present value of a single cash flow?

b. What is the present value of a 5-year annuity?

c. What is the present value of a 10-year annuity?

d. What is the present value of a 100-year annuity?

e. What is the present value of a $250 perpetuity?

f. Do you detect a relationship between the number of periods of an annuity and its resemblance to a perpetuity? Explain.

## Relevant Questions

Use the following table of cash flows to answer parts (a) and (b). Assume an 8% discount rate. End of Year Cash Flow 1............... $10,000 2............... 10,000 3............... 10,000 4............... ...Evaluate each of the following three investments, each costing $1,000 today and providing the returns noted below, over the next five years. Investment 1: $2,000 lump sum to be received in five years Investment 2: $300 at ...Find the present value of a 3-year, $20,000 ordinary annuity deposited into an account that pays 12% annual interest, compounded monthly. Solve for the present value of the annuity in the following ways: a. As three single ...You plan to start saving for your son’s college education. He will begin college when he turns 18 years old and will need $4,000 then and in each of the following three years. You will make a deposit at the end of this ...A best-selling author decides to cash in on her latest novel by selling the rights to the book’s royalties for the next six years to an investor. Royalty payments arrive once per year, starting one year from now. In the ...Post your question