Calculate the present value of your payments

Assignment Help Financial Management

Reference no: EM131979167

A local bank advertises the following deal: Pay us $100 at the end of each year for 12 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever. a. Calculate the present value of your payments to the bank if the interest rate is 4.75%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the present value of a $100 perpetuity deferred for 12 years if the interest rate is 4.75%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Is this a good deal?

Reference no: EM131979167

Questions Cloud

Consider four-year amortizing loan : Consider a 4-year amortizing loan. You borrow $1,100 initially and repay it in four equal annual year-end payments.

Design of a new system for identifying websites : You have been asked to oversee the design of a new system for identifying websites that are unsuitable to display targeting advertisements

What is its wacc after the downgrade : Time Warner's credit rating was downgraded from AAA to BBB. What is its WACC after the downgrade?

Discuss the key concerns of physicians and nurses : From the scenario, analyze the concept of patients' rights, and ascertain the key concerns of physicians and nurses as they apply to patients with AIDS.

Calculate the present value of your payments : Calculate the present value of your payments to the bank if the interest rate is 4.75%.

Difference in two bank account balances after two years : what will be the difference in the two bank account balances after two years?

Key types of policies of a public health insurance program : Analyze the key types of policies required for the delivery of a public health insurance program, and hypothesize their main effects on the achievement.

Determine ways that strategic planning can be used : Determine two (2) ways that strategic planning can be used to help management implement roles based access (RBA) and monitor compliance.

What is the effective annual rate on that loan : What is the effective annual rate on that loan? What rate is the lender more likely to quote on the loan?

User Account

All Pages