Calculate the present value of each following pattern of cash flows: a) You are considering an investment.
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Question:
Calculate the present value of each following pattern of cash flows:
a) You are considering an investment. A five-year term deposit will provide a 6.25% interest rate, compounding every 2 months. How much must invest today to receive $17,500 at the end of five years?
b) You just signed a 6 year loan, requiring that you make a payment of $525 at the end of each month. The loan's interest rate is 8%, compounding monthly. What is the principal of the loan?
c) What is the present value of receiving 3,750 at the end of each year for five years, along with another $25,000 at the end of five years, assuming a 3.25% interest rate, compounding annually?
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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