2. Michelle receives an inflation-adjusted Social Security check at the end of every year for 25...
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2. Michelle receives an inflation-adjusted Social Security check at the end of every year for 25 years. If the first check is for $1,000 and the inflation factor used is 5% (i.e. each payment is 5% larger than the prior payment), what is the present value of Michelle's payment stream assuming an annual effective interest rate of 10.25%? What is the nominal interest rate convertible monthly equivalent to an effective discount rate of 4% convertible quarterly? 3. For i=10% and n=3, what is ratio of (lä)ni to (Dä)ni? A loan of $10,000 is repaid using the amortization method with payments at the end of each year for 12 years at an annual interest rate of 5%. To the nearest dollar, find the principal repaid in the 9th payment. 2. Michelle receives an inflation-adjusted Social Security check at the end of every year for 25 years. If the first check is for $1,000 and the inflation factor used is 5% (i.e. each payment is 5% larger than the prior payment), what is the present value of Michelle's payment stream assuming an annual effective interest rate of 10.25%? What is the nominal interest rate convertible monthly equivalent to an effective discount rate of 4% convertible quarterly? 3. For i=10% and n=3, what is ratio of (lä)ni to (Dä)ni? A loan of $10,000 is repaid using the amortization method with payments at the end of each year for 12 years at an annual interest rate of 5%. To the nearest dollar, find the principal repaid in the 9th payment.
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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