Question: please help hat is the present value of $2,000? (CL05-2) 20. Annuities. A famous quarterback just signed a $15 million contract providing $3 million a





please help
hat is the present value of $2,000? (CL05-2) 20. Annuities. A famous quarterback just signed a $15 million contract providing $3 million a year for 5 years. A less famous receiver signed a $14 million 5-year contract providing $4 million now and $2 million a year for 5 years. The interest rate is 10%. Who is better paid? @L 05-3) 75. Real versus Nominal Rates. You will receive $100 from a savings bond in 3 years. The nominal interest rate is 87. (L05-5) 2. What is the present value of the proceeds from the bond? b. If the inflation rate over the next few years is expected to be 3%, what will the real value of the $ 100 payoff be in terms of today's dollars? c. What is the real interest rate? d. Show that the real payoff from the bond [from part (b) discounted at the real interest rate (from part (c) gives the same present 0 alue of 4 perpetuities if the long-term interest rate is 6%? b. What is the value of 2.5% perpetuities? 26. Annuities. (CL05-3) a. What is the present value of a 3-year annuity of $100 if the discount rate is 6%? b. What is the present value of the annuity in part (a) if you have to wait 2 years instead of 1 year for the first payment? il you make the first payment on the loan immediately instead of at the end of the first year? 38. Annuity Due. The $40 million lottery payment that you have just won actually pays $2 million per year for 20 years. The interest rate is 8% (QL05-3) a. If the first payment comes in 1 year, what is the present value of the winnings? b. What is the present value if the first payment comes immediately? 39. Amortizing Loan. You take out a 30-year $100.000 mortgage loan with an af has earning 56,000 a year. In 2017 she earned $80,000 a year. However, on average. prices in 2017 were higher than in 1950. What was her real income in 2017 in terms of constant 1950 dollars? Use the data in Table 5.8. L05-5) 67. Real versus Nominal Dollars. Your consulting firm will produce cash flows of S100.000 this year, and you expect cash flow thereafter to keep pace with any increase in the general level of prices. The interest rate currently is 6%, and you anticipate inflation of about 2%. (@L 05-5) a What is the present value of your firm's msh flow forum
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