What is the implied discount rate in an annuity product

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1. What is the implied discount rate in an annuity product that costs $50,000 today and pays the owner twenty annual payments of $3,000? hint: you need to use the Excel RATE function and enter the payment as a negative number.

2. How many months will it take to pay o a $10,000 balance on a credit card that has an APR of 18%, assuming you charge no additional money on the card and make regular monthly payments of $175? hint: you need to use the Excel NPER function and enter the payment as a negative number.

3. What is the monthly payment on a $200,000 30-year 6% xed rate mortgage?

4. How much money will you have in twenty-ve years if over that period you make monthly deposits of $300.00 into an investment account that earns an APR of 6% over that period?

5. Assuming a discount rate of 7%, how much money should you be willing to pay for an investment that will generate annual cash ows of $12,000 per year for ten years?

Reference no: EM132289006

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