Suppose you take out a car loan that requires you to pay $10,000 now, $4,000 at the end of year 1, and $7,000 at the end of year 2. The interest rate is 2% now and increases to 8% in the next year. What is the present value of the payments? Enter your response below rounded to 2 decimal places.

An investment promises to pay you $6,000 per year forever with the first payment at time 1. If alternative investments of similar risk earn 3.66% per year, determine the maximum you would be willing to pay for this investment. Enter your response below (rounded to 2 decimal places).

Suppose you will receive payments of $17,000, $13,000, and $1,000 in 3, 4, and 9 year(s) from now, respectively. What is the total future value of all payments 10 years from now if the interest rate is 10%? Enter your response below rounded to 2 decimal places.

Answer rating: 100% (QA)

Solution Present value of the car loan payments To calculate the present value of the payments we need to discount each payment to its present value u... View the full answer