Determine the maximum would be willing to pay

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Question 1: An investment promises to pay you $2,500 per year forever with the first payment in 9 years. If alternative investments of similar risk earn 8% per year, determine the maximum you would be willing to pay for this investment.

Question 2: You are planning for your retirement in 20 years. At that time you want to have saved $7,000,000. How much do you need to save each quarter for the next 20 years if the interest rate on your investment will be 11% per year (APR)?

Question 3: Suppose you will receive payments of $20,000 at the beginning of the next 14 years (i.e., the first payment is today). What is the present value of all the payments? The interest rate is 5%.

Reference no: EM132482543

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