What is the current value of the prize for theo

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Problem 1: You desperately need some money and only your 'miserly' friend has any. He agrees to loan you the money you need, if you make payments of $20 a month for the next six months. In keeping with his reputation, he requires that the first payment be paid today. He also charges you 1.5 percent interest per month. How much money are you borrowing?

A. $115.65

B. $116.56

C. $113.94

D. $126.46

E. $114.96

Problem 2: Theo just won a prize that will pay him $12,000 a year for 12 years, starting at the end of Year 12. What is the current value of this prize if the discount rate is 9 percent, compounded annually?

A. $34,282.98

B. $30,550.64

C. $33,300.20

D. $86,191.91

E. $85,928.70

Reference no: EM132958130

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