2.What is the present value of a perpetuity, that pays $100,000,000 per year, beginning one year from
Question:
2.What is the present value of a perpetuity, that pays $100,000,000 per year, beginning one year from now with an interest rate of 10%?
3.A borrower agrees to repay an investor $2,000 in five years. Assuming a 6% interest rate, what is the value of the bond today?
4.The present value of an investment today is $585.43. The investment matures in 10 years and it was agreed the investor would be paid $1,000. What is the interest rate the investor is expected to earn?
5.You plan a purchasing a home in 5 years. Assuming you save $2,500 each year for a down payment, you plan to earn 4% interest and you will deposit the funds at the end of each year. How much will you have after 5 years?
6.You inherit $100,000 and invest the inheritance at 7% each year. What would be the withdrawal at the end of the next 10 years and end with a zero balance?