Question: 1. PRESENT VALUE What is the present value of a security that will pay $29,000 in 20 years if securities of equal risk pay 5%

PRESENT VALUE What is the present value of a security that will pay $29,000 in 20 years if securities of equal risk pay 5% annually?TIME FOR A LUMP SUM TO DOUBLE If you deposit money today in an account that pays 4% annual interest, how long will it take to double your money?FUTURE VALUE: ANNUITY VERSUS ANNUITY DUE What's the future value of a 5%, 5-year ordinary annuity that pays $800 each year? If this was an annuity duc, what would its future value be?LOAN AMORTIZATION AND EAR You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 8% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR?PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES Find the following val- ucs. Compounding/discounting occurs annually. a. An initial $200 compounded for 10 years at 4% b. An initial $200 compounded for 10 years at 8% c. The present value of $200 due in 10 years at 4% d. The present value of $1,870 due in 10 years at 8% and at 4% e. Define present value and illustrate it using a time line with data from part d. How are present values affected by interest rates?EFFECTIVE RATE OF INTEREST Find the interest rates earned on each of the following: a. You borrow $720 and promise to pay back $792 at the end of 1 year. b. You lend $720, and the borrower promises to pay you $792 at the end of 1 year. c. You borrow $65,000 and promise to pay back $98,319 at the end of 14 years. d. You borrow $15,000 and promise to make payments of $4,058.60 at the end of each year for 5 years.FUTURE VALUE OF AN ANNUITY Find the future values of these ordinary annuities. Compounding occurs once a year. a. $500 per year for 8 years at 14% b. $250 per year for 4 years at 7% c. $700 per year for 4 years at 0% d. Rework parts a, b, and c assuming they are annuities due.PRESENT VALUE OF A PERPETUITY What is the present value of a $600 perpetuity if the interest rate is 5%? If interest rates doubled to 10%, what would its present value be

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