What is the present value of that annuity if discount rate

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1. You are considering preferred stock that pays a quarterly dividend of $1.50. If your desired return is 3% per quarter, how much would you be willing to pay?

2. An investment will provide you with $100 at the end of each year for the next 10 years. What is the present value of that annuity if the discount rate is 8% annually?

3. What is the present value of the above if the payments are received at the beginning of each year?

4. If you deposit those payments into an account earning 8%, what will the future value be in 10 years?

5. What will the future value be if you open the account with $1,000 today, and then make the $100 deposits at the end of each year?

Reference no: EM13727154

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