Question: Q1. Suppose you signed a contract for a special assignment over the next 5 years. You will be paid$26,703 at the end of each year.

Q1. Suppose you signed a contract for a special assignment over the next 5 years. You will be paid$26,703 at the end of each year. If your required rate of return is 18.00%, what is this contract worth in today?

Q2. What is the most that you would pay for an investment that promises to pay $13,621 a year forever with the first payment starting one year from now? Assume that your required rate of return for this investment is 09.00%.

Q3. A loan has a stated annual rate of 20.00%. If loan payments are made monthly and interest is compounded monthly, what is the effective annual rate of interest?

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