How much will you have in eight years

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Question 1 - lmprudential, Inc. has an unfunded pension liability of $650 million that must be paid in 20 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 7.4 percent, what is the present value of this liability?

Question 2 - You are scheduled to receive $20,000 in two years. When you receive it, you will invest it for six more years at 6.4 percent per year. How much will you have in eight years?

Question 3 - First City Bank pays 8 percent simple interest on its saving account balances, whereas Second City Bank pays 8 percent compounded annual. If you made a $5,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years?

Reference no: EM133111694

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