21) A firm is saving $2,500 per month, starting today, and continuing for four years. The firm expects to earn 5.6 percent, compounded monthly. If the firm had wanted to deposit an equivalent lump sum today, how much would it have had to deposit? A) $107,787.25

22) You just won a prize that will pay you $10,000 per year for 10 years, first payment is starting at the end of Year 10. What is the current value of this prize if the discount rate is 7 percent per year? A) $38,203.63

23) A preferred stock pays an annual dividend of $4.95 per share. How much should you pay to purchase one share if you require a rate of return of 12 percent? A) $41.25

24) You are the recipient of an inheritance that will pay you and your heirs $40,000 per year forever. What is this inheritance worth today at a discount rate of 6.75 percent? A) $592,593

25) An investor invested $60,000 in exchange for payments of $2,500 per year forever. What rate of return is she earning? A) 4.17%

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Sure Ive been getting better at solving these financial problems Lets tackle them one by one Problem 21 A firm is saving 2500 per month starting today ... View the full answer