What is the present value of a perpetuity of $100 if the appropriate discount rate is 7%? If interest rates in general were to double and the appropriate discount rate rose to 14%, what would happen to the present value of the perpetuity?

1. Your firm has decided to purchase a new $15,000 machine. You can pay now and take a 3 percent discount or pay $6,000 each year for the next three years. What is the interest rate at which the two alternatives are equal? Why?

3.57 Consider the following three individuals. Just after their 19th payment: o Robert Dixon had a balance of $80,000 on a 9%, 15-year mortgage; o Wanda Harper had a balance of $80,000 on a 9%, 20-year mortgage; and o Tony Zang had a balance of $80,000 on a 9%, 30-year mortgage. How much interest did each individual pay on the 20th payment?

6) With an interest rate of 8 percent, the present value of $100 received one year from now is approximately

Compute the following: The present value of $25,000 each year for 4 years at a 7 percent interest rate The present value of $152,000 each year for 5 years at a 6 percent interest rate The present value of $60,000 each year for 10 years at a 6.5 percent interest rate

You plan to retire in 35 years and can invest to earn 6.85 percent. You estimate that you will need $82,000 at the end of each year for an estimated 30 years after retirement, and you expect to earn 4.5 percent during those retirement years. How much do you need to set aside at the end of each year to accumulate the money necessary for your retirement? (Assume year-end cash flows.) I will need this much at retirement _____________and will need to set aside ___________per year (at the end of each year.

A perpetuity has payments at the end of each four-year period. The first payment at the end of four years is 1. Each subsequent payment is 4 more than the previous payment. It is known that v4=0.79 Calculate the present value of this perpetuity A. $ 30.18 B. $ 86.24 C. $ 60.37 D. $ 24.15 E. $ 75.46

6. You may borrow or lend at a 5% interest rate, which you expect to remain stable forever. Make a choice and explain your answer in each scenario below. a. You may receive a gift of $500 today or a gift of $540 next year. b. You may receive gift of $100 today or a four-year loan of $500 without interest. c. You may receive a $350 rebate on an $8000 car or one year of no-interest financing on the full price of the car. d. You have just won $1 million in the lottery. You may receive $500,000 now or the full million, paid out in 20 annual payments of $50,000. e. Alternatively, you may take $500,000 now or receive $25,000 per year for eternity (a contract that your heirs will inherit).

35. Which of the following is the correct way to compute the future value of $100 put into an account that earns 4 percent interest for 10 years?   a. $100(1 + .0410)   b. $100(1 + .04 × 10)   c. $100 × 10 × (1 + .04)   d. $100(1 + .04)10 Group of answer choices c b d a

Consider a $1200 bond that makes $30 annual coupon payments. If the interest rate is 2 percent and the bond matures in two years, what is the bond's present value? Carefully follow all mathematical instructions.  Round intermediate steps to four decimal places and your final answer to two decimal places.