20. Compute the following scenarios using different interest rates of 6%, 8%, and 10% compounded annually throughout.
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20. Compute the following scenarios using different interest rates of 6%, 8%, and 10% compounded annually throughout.
a. What is the present value of a deferred annuity with a 10-year deferral period followed by a 10-year ordinary annuity with annual $10,000 payments?
b. What is the annual annuity payment if a lump sum of $50,000 is invested for 10 years followed by a 10-year ordinary annuity?
c. What is the term of the annuity if a lump sum of $50,000 is invested for 10 years followed by an ordinary annuity paying $20,000 annually? d. Discuss your observations from all of the above scenarios.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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