1. The Shawness Company must pay $5,500 one year from today; $6,500 two years from today; $7,500 three years from today; $9,500 four years from today; and $15,000 five years from today to settle a liability. At an interest rate of 6.5%, what is the present value of these future cash flow payments?

2. You currently have $2,500 in your savings account. You would like to have $8,000 four years from today. How much must you deposit in equal amounts at the end of each month for the next five years in order to reach your goal at an interest rate of 9% per year, compounded monthly?

Answer rating: 100% (QA)

1 To find the present value of the future cash flow payments we need to discount each payment back t... View the full answer