You are comparing two annual salaries with equal present values. The discount rate applied is 7.25 percent.
Question:
You are comparing two annual salaries with equal present values. The discount rate applied is 7.25 percent. An annuity pays $2,500 on the first day of each year for 15 years. If paid at the end of each year, how much does the second annuity pay each year for 15 years?
Trish gets $450 on the first of every month. Josh gets $450 on the last day of every month. Both Trish and Josh will get paid for the next four years. At the 9.5 percent discount rate, what is the difference in the present value of these two payment sets?
Travis International has a one-time expense of $2.86 million payable after three years. Since the firm cannot increase this amount in one day, it wants to save an equal amount each month over the next three years to finance this expense. If the firm can earn 2.1 percent on its savings, how much should it save each month? |
Your car dealer wants to rent you a new car for $190 a month for 36 months. Payments are made on the first day of each month from the day you sign the lease. If your cost of money is 6.5 percent, what is the present value of the lease?