End of the period is reinvested the next period

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Reference no: EM131850211

1. What is the present value of the following annuity? $4,572 every half year at the beginning of the period for the next 9 years, discounted back to the present at 7.11 percent per year, compounded semiannually.

2. A firm’s dividends have grown over the last several years. 8 years ago the firm paid a dividend of $1. Yesterday it paid a dividend of $7. What was the average annual growth rate of dividends for this firm?

3. You placed $6,428 in a savings account today that earns an annual interest rate of 4.61 percent, compounded semiannually. How much will you have in this account at the end of 9 years? Assume that all interest received at the end of the period is reinvested the next period.

Reference no: EM131850211

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