An annual prize is to be established for the student that wins the competition. The prize money comes from a perpetuity earning interest of 2% p.a. compounded monthly. The prize will pay a fixed amount each year, starting in one year’s time. If the initial deposit is $2,000, how much is the prize worth? Give your answer rounded to the nearest cent.
An annual prize is to be established for the student that wins the competition. The prize money comes from a perpetuity earning interest of 2% p.a. compounded monthly. The prize will pay a fixed amount each year, starting in one year’s time. If the initial deposit is $2,000, how much is the prize worth? Give your answer rounded to the nearest cent.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An annual prize is to be established for the student that wins the competition. The prize money comes from a perpetuity earning interest of 2% p.a. compounded monthly. The prize will pay a fixed amount each year, starting in one year’s time. If the initial deposit is $2,000, how much is the prize worth? Give your answer rounded to the nearest cent.
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