Exercise A3-17
Present Values
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Required:
a. Determine the present value of a single $14,000 cash flow in 7 years if the interest (discount) rate is 8% per year. Round your answer to the nearest cent.
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b. Determine the number of periods for which $5,820 must be invested at an annual interest (discount) rate of 7% to produce an investment balance of $10,000. Round your answer to the nearest whole number of periods.
fill in the blank 2 periods
c. Determine the size of the annual cash flow for a 25-year
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d. Determine the annual interest rate at which an investment of $2,542 will provide for a single $4,000 cash flow in 4 years. Round your answer to the nearest whole percentage rate (for example, 10.6% rounds to 11%).
fill in the blank 4 %
e. Determine the annual interest rate earned by an annuity that costs $17,119 and provides 15 payments of $2,000 each, one at the end of each of the next 15 years. Round your answer to the nearest whole percentage rate (for example, 10.6% rounds to 11%).
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