1.You have signed a contract with the following cash flows:

1 year from today: $19,000

2 years from today: $19,000

3 years from today: $19,000

4 years from today: $12,000

Using a discount rate of 6.64%, what is the current value of these four cash flows today?

2. You have financed a new product that will require quarterly payments for ten years. If the annual interest rate is 6.71%, what is the rate of the annual percentage yield (APY)?

3. Five years ago you deposited $1,000 in a savings account that compounds interest monthly. You now have $2,567 in the account. What annual interest rate did you earn?

Answer rating: 100% (QA)

1 To calculate the current value of the cash flows you can use the formula for the present value of ... View the full answer