If you are considering the purchase of a consol that pays $60 per year forever, and the rate of interest you want to earn is 10% per year, how much money should you pay for the consol?
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If you are considering the purchase of a consol that pays $60 per year forever, and the rate of interest you want to earn is 10% per year, how much money should you pay for the consol?
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- What is the present value of $3,000 paid each year forever, assuming a discount rate of 5% and the first payment occurs one year from now? Equivalently: What amount would you have to invest today at an interest rate of 5% to generate an annual payment of $3,000 forever?When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be earning 6% per year. Find PV Annuity: If you wish to do that for 10 years starting one year after you retire, what does the balance in your retirement account have to be when you retire? Find PV Annuity: If the account will be earning 3% per year, and you wish to do that for 20 years starting on the day you retire, what does the balance in your retirement account have to be when you retire?in planning for your retirement, you would like to withdraw $80,000 per year for 17 years, the first withdrawal will occur 20 years from today. A- what amount must you invest today if your return is 10% per year? B-What amount must you invest today if your return is 15% per year?
- You invest in a project that is expected to pay you $960 every year forever. If the first payment to you occurs 3 years from today and the discount rate is 3.8%, then what is its value today (Round to the nearest dollar).You are interested in buying a piece of real estate property that could be worth $490,000 in four years from now. If your earning interest rate is 7% compounded annually, how much would you be willing to pay for this property now?In planning for your retirement, you have decided that you would like to be able to withdraw $60,000 per year for a 10 year period. The first withdrawal will occur 20 years from today. a. What amount must you invest today if your return is 10% per year? b. What amount must you invest today if your return is 15% per year?
- How much would you pay for an asset that costs you 10,000 for each of four years in a row (starting right now) and pays off with a benefit of 2,000 every year after that forever. Assume interest rate of 0.07%You will receive a cash payment of $6.4 in 4 years. If the relevant interest rate is 16.4%, how much is it worth today? Answer:C) What is the present value of $7,500 per year, at a discount rate of 8.5 percent, if the first payment is received 10 years from now and the last payment is received 25 years from now?You have signed up for your 401k and will deposit $750 into your 401k when you are paid at the end of each month. If you earn a compound annual rate of return of 6%, how much will you have in 15 years?What would your monthly car payment be if you financed a $35,000 car for 3 years at a rate of 6%?The appropriate discount rate for the following cash flows is 12 percent compounded quarterly. What is the present value of the cash flows? Year 1 CF=700, Year 2 CF=600, Year 3 CF=0, Year 4 CF=1000
- a) If you invest $100 every year for the next 20 years starting one year from today and you earn interest rate of 10% per year, how much will you have at the end of the 20 years? b) How much must you invest each year if you want to have $50000 at the end of 20 years?Assume you would like to have $500,000 by the time you reach retirement. Assume a 5% interest rate and 20 years until retirement. What will you need to contribute monthly to achieve your goal?You’re buying your first house for $180,000, giving $35,000 as down payment. The amount you will finance will paid in 40 years with monthly interest rate of 0.5%. What is the value of the equal payments you will have to make for 30 years?