Robert Van Winkle (perhaps better known as Vanilla Ice) wants you to allow him into your...
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Robert Van Winkle (perhaps better known as Vanilla Ice) wants you to allow him into your home to fix it up. Just imagine how awesome it will be when he is done "pimping your hizzie" (I am pretty sure that this is how he talks). You do have to pay him for this honor, and he is willing to accept payment in one of two ways: a. A lump sum of $250,000 b. Payments of $25,000 at the end of each year for the next 40 years. Given 9% annual compounding, which option should you choose if you want to pay him the LEAST money? Relevant Information Annual Interest Rate Periods Per Year Number of Years Needed Information Answer: Present Value Future Value Payment Rate Number of Periods Additional Calculations (if needed) a b PV FV PMT RATE NPER Robert Van Winkle (perhaps better known as Vanilla Ice) wants you to allow him into your home to fix it up. Just imagine how awesome it will be when he is done "pimping your hizzie" (I am pretty sure that this is how he talks). You do have to pay him for this honor, and he is willing to accept payment in one of two ways: a. A lump sum of $250,000 b. Payments of $25,000 at the end of each year for the next 40 years. Given 9% annual compounding, which option should you choose if you want to pay him the LEAST money? Relevant Information Annual Interest Rate Periods Per Year Number of Years Needed Information Answer: Present Value Future Value Payment Rate Number of Periods Additional Calculations (if needed) a b PV FV PMT RATE NPER
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Related Book For
Taxation For Decision Makers 2017
ISBN: 9781119373735
7th Edition
Authors: Shirley Dennis Escoffier, Karen Fortin
Posted Date:
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