Determine effective annual percentage interest rate on cd

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Reference no: EM13928861

1. You own a small business that is for sale. You have been offered $2,000 per year for five years, with the first receipt at the end of four years. Calculate the present value of this offer, using a 14 percent discount rate.

2. Yolanda Williams is 35 years old today and is beginning to plan for her retire- ment. She wants to set aside an equal amount at the end of each of the next 25 years so that she can retire at age 60. She expects to live to an age of 80 and wants to be able to withdraw $50,000 per year from the account on her 61st through 80th birthdays. The account is expected to earn 10 percent per year for the entire period of time. Determine the size of the annual deposits that she must make.

3. First State Bank offers a certificate of deposit that pays a 4.75 percent annual rate compounded monthly. Determine the effective annual percentage interest rate on this CD.

Reference no: EM13928861

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