Q #1

(Future value) Bob Terwilliger received $15,806 for his services as financial consultant to the mayor's office of his hometown of Springfield. Bob says that his consulting work was his civic duty and that he should not receive any compensation. So, he has invested his paycheck into an account paying 4.44 percent annual interest and left the account in his will to the city of Springfield on the condition that the city cannot collect any money from the account for 200 years. How much money will the city receive from Bob's generosity in 200 years? The amount of money the city will receive from Bob's generosity is $ . (Round to the nearest cent.)(Loan amortization) On December 31, SeniNan Chen borrowed $110,000 agreeing to repay this sum in 23 equal endeofiyear instalments and 16 percent interest on the declining balance. How large must the annual payments be? The amount ofthe annual payments must be $ , (Round to the nearest cent) (Presentvet'ue compamn)'r'ou are offered $1 ,300 today, $12,000 in 8 years, or $25000 in 20 years, Assuming that you can earn 12 percent on your money, which offer should you choose? a. What is the present value of $25,000 in 20 years discounted at 12 percent interest rate'r" $ (Round to the nearest cent) b. What is the present value of $12000 in 8 years discounted at 12 percent interest rate? $ (Round to the nearest cent ) c. Which oer should you choose? (Select the best chOice below.) A. Choose $12,000 in 8 years because its present value is the highest. -:y::- E. Cheese $1,300 today because its present value is the highest, C. Choose $25,000 in 20 years because its present value is the highest