consider the following schedule of payments. End of Year 0 Payment $2,000 2,000 12345 1,500 2,500...

 

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consider the following schedule of payments. End of Year 0 Payment $2,000 2,000 12345 1,500 2,500 4,000 a. What is the value of this payment stream at the end of Year 5 if the payments are invested at 10 percent annually? b. What payment today (Year 0) would be needed to accumulate the needed $20,000? (Assume that the payments for Years 1 through 5 remain the same.) Consider Bay City Savings Bank, which pays 10 percent interest compounded continuously. What is the effective annual rate under these terms? a b. What is the future value of a $10,000 lump sum after five years? c. What is the future value of a 5-year ordinary annuity with payments of $2,000 each? The client is also considering borrowing the $20,000 for his daughter's first year of college and repaying the loan over a four-year period. Assuming that he can borrow the funds at a 10 percent interest rate, what amount of interest and principal will be repaid at the end of each year? consider the following schedule of payments. End of Year 0 Payment $2,000 2,000 12345 1,500 2,500 4,000 a. What is the value of this payment stream at the end of Year 5 if the payments are invested at 10 percent annually? b. What payment today (Year 0) would be needed to accumulate the needed $20,000? (Assume that the payments for Years 1 through 5 remain the same.) Consider Bay City Savings Bank, which pays 10 percent interest compounded continuously. What is the effective annual rate under these terms? a b. What is the future value of a $10,000 lump sum after five years? c. What is the future value of a 5-year ordinary annuity with payments of $2,000 each? The client is also considering borrowing the $20,000 for his daughter's first year of college and repaying the loan over a four-year period. Assuming that he can borrow the funds at a 10 percent interest rate, what amount of interest and principal will be repaid at the end of each year?