first payment being made today. If bank pays compounding, how much will be in your account after 10 years. Use following information to answer next two questions: You deposited following stream of cash flow at the end of year: Year 1 4 deposit 5000 4000 7000 rate of interest 8% 8.5% 6 10% What will be total amount in your account at the end of 6 year? What is present value of your deposit? 8. You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 annual installments. The first payment is next year. How much is the prize really worth? The discount rate is 8 percent.
first payment being made today. If bank pays compounding, how much will be in your account after 10 years. Use following information to answer next two questions: You deposited following stream of cash flow at the end of year: Year 1 4 deposit 5000 4000 7000 rate of interest 8% 8.5% 6 10% What will be total amount in your account at the end of 6 year? What is present value of your deposit? 8. You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 annual installments. The first payment is next year. How much is the prize really worth? The discount rate is 8 percent.
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
Related questions
Question
do not use excel
Transcribed Image Text:first payment being made today. If the bank pays a nominal interest rate of 11 percent but uses semiannual
compounding, how much will be in your account after 10 years.
Use following information to answer next two questions:
You deposited following stream of cash flow at the end of year:
Year
1
deposit
5000
9.
4000
7000
6
What will be total amount in your account at the end of 6 year? What is present value of your deposit?
8.
You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 annual
installments. The first payment is next year. How much is the prize really worth? The discount rate is 8
percent.
rate of interest
8%
8.5%
10%
Offered rate is 12 percent.
ENC
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education