Annual percentage rate-what is the effective annual rate

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1.What is the present value of the following annuity at year = 0. The annuity pays $100 annually for 20 years starting from year = 5 (i.e., cash flows starts at year = 5 and ends at year = 24) with a discount rate of 8%.

2. A project produces a cash flow of $542 in year 1, $147 in year 2, and $764 in year 3. If the cost of capital is 15%, what is the project's PV? If the project requires an investment of $1,240, what is its NPV? Should this project be accepted?

3. Given a monthly rate of 2.1%, what is the annual percentage rate (APR), what is the effective annual rate (EAR)?

Reference no: EM131969381

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