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How much is he willing to pay for this money machine

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1. Derek will deposit $4,544.00 per year for 24.00 years into an account that earns 8.00%, The first deposit is made next year. How much will be in the account 44.00 years from today?

2. Derek will deposit $5,139.00 per year for 15.00 years into an account that earns 15.00%, The first deposit is made next year. He has $16,925.00 in his account today. How much will be in the account 47.00 years from today?

3. Derek will deposit $3,529.00 per year for 11.00 years into an account that earns 6.00%. Assuming the first deposit is made 5.00 years from today, how much will be in the account 31.00 years from today?

4. What is the value today of receiving $2,134.00 per year forever? Assume the first payment is made next year and the discount rate is 4.00%.

5. Derek will deposit $1,030.00 per year into an account starting today and ending in year 25.00. The account that earns 12.00%. How much will be in the account 25.0 years from today?

6. Derek has the opportunity to buy a money machine today. The money machine will pay Derek $34,825.00 exactly 5.00 years from today. Assuming that Derek believes the appropriate discount rate is 8.00%, how much is he willing to pay for this money machine?

Reference no: EM133495880

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