What is the present value of consol

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Reference no: EM13847816

1. Suppose 20 years ago your mother deposited $ 2500 in an account earning 12% annually. Obtain today's value.

a. 24,115.73

b.24,116.73

c.24,117.73

d.24,118.73

e. None of the above

2. Suppose 20 years ago your mother deposited $ 2500 in an account earning 12%. After 10 years she withdrew $ 1,000. Obtain today’s value.

a. 21,007.88

b. 21,008.88

c. 21,009.88

d. 21,010.88

e. None of the above

3. What is the present value of a consol, assuming it offers $ 20 at the end of every year for ever and k = 8%?

a. 20

b. 160

c. 250

d. 400

e. None of the above

4. Suppose you need $ 20,000 to buy a new car in 5 years. Assume that you use an account earning 10%. What do you have to deposit today?

a. 12,414. 43

b. 12,416.43

c. 12,418.43

d. 12,420.43

e. None of the above

Reference no: EM13847816

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