d. Calculate the future sum of ?$1 comma 5001,500?, given that it will be held in the...

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Finance

d. Calculate the future sum of

?$1 comma 5001,500?,

given that it will be held in the bank for

1515

years and earn

1111

percent compounded semiannually.

e. What is an annuity? due? How does this differ from anordinary? annuity?

f. What is the present value of an ordinary annuity of

?$2 comma 4002,400

per year for

1212

years discounted back to the present at

1515

?percent? What would be the present value if it were an annuity?due?

g. What is the future value of an ordinary annuity of

?$2 comma 4002,400

per year for

1212

years compounded at

1515

?percent? What would be the future value if it were an annuity?due?

h. You have just borrowed

?$160 comma 000160,000?,

and you agree to pay it back over the next

2525

years in

2525

equal? end-of-year payments plus

1515

percent compound interest on the unpaid balance. What will bethe size of these? payments?

i. What is the present value of a perpetuity of

?$1 comma 5001,500

per year discounted back to the present at

1818

?percent?

j. What is the present value of an annuity of

?$1 comma 2001,200

per year for 10? years, with the first payment occurring at theend of year 10? (that is, ten

?$1 comma 2001,200

payments occurring at the end of year 10 through year? 19),given a discount rate of

1313

?percent?

k. Given a discount rate of

1111

?percent, what is the present value of a perpetuity of

?$1 comma 9001,900

per year if the first payment does not begin until the end ofyear? 10?

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Transcribed Image Text

d. Calculate the future sum of?$1 comma 5001,500?,given that it will be held in the bank for1515years and earn1111percent compounded semiannually.e. What is an annuity? due? How does this differ from anordinary? annuity?f. What is the present value of an ordinary annuity of?$2 comma 4002,400per year for1212years discounted back to the present at1515?percent? What would be the present value if it were an annuity?due?g. What is the future value of an ordinary annuity of?$2 comma 4002,400per year for1212years compounded at1515?percent? What would be the future value if it were an annuity?due?h. You have just borrowed?$160 comma 000160,000?,and you agree to pay it back over the next2525years in2525equal? end-of-year payments plus1515percent compound interest on the unpaid balance. What will bethe size of these? payments?i. What is the present value of a perpetuity of?$1 comma 5001,500per year discounted back to the present at1818?percent?j. What is the present value of an annuity of?$1 comma 2001,200per year for 10? years, with the first payment occurring at theend of year 10? (that is, ten?$1 comma 2001,200payments occurring at the end of year 10 through year? 19),given a discount rate of1313?percent?k. Given a discount rate of1111?percent, what is the present value of a perpetuity of?$1 comma 9001,900per year if the first payment does not begin until the end ofyear? 10?

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