The periodic rate and the effective annual rat

Reference no: EM133322730

Question 1) A friend has been awarded a settlement in a lawsuit that specifies he be paid $30,000 at the start of each quarter for the next 6 years. Additionally, at the end of year 6, he will receive a one-time payment of $500,000. He wishes to renegotiate this settlement to a single lump sum payment due today. If we assume your friend can earn 8% per annum compounded quarterly on sums invested, what is the minimum amount that he should accept in the renegotiated settlement?

Question 2) Using and example, distinguish between the nominal rate, the periodic rate and the effective annual rat

Reference no: EM133322730

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