Compute the present value of your prize

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Reference no: EM131994867

1. You borrowed some money at 8 percent per annum. You repay the loan by making three annual payments of $ 239 (first payment made at t = 1), followed by five annual payments of $ 419 , followed by four annual payments of $ 842 . How much did you borrow?

2. You just won a contest. The prize is a lump sum payment of $ 89,180 , however, you will not receive this payment for 15 years. Compute the present value of your prize assuming a discount rate of 13 percent per annum.

Reference no: EM131994867

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