What is the growth rate of cash flows

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You have been named the recipient of a trust fund as part of an inheritance your wealthy Grandfather left you. You will immediately receive $350,000. Each month thereafter your payment will get bigger by .004 (.4%) so that the payment you receive next month will be .004 bigger than this month's payment, and so forth and so on. The payments will last for 18 years. You decide that you want to sell the rights to the payments. Assume the monthly market rate of interest is .005 (.5%.)

Problem A) What is the cash flow ar t=0? [if there is no cash flow at t=0 then put 0]

Problem B) What is the cash slow at t=1?

Problem C) What is the growth rate of cash flows?

Problem D) What is the Interest rate?

Problem E) What is "t" (the number of payments/compounding periods)

Problem F) How much can you sell the right to the payments for?

Problem G) Was this a PV or FV problem?

Reference no: EM132915287

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