What is the present value of these cash flows

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Reference no: EM131906614

a. If Hamidou invests $7500 today at 8 percent compounded semi-annually, how much would he accumulate at the end of 10 years?

b. If Victoria wants to have $1700 in seven years, how much money must she put in a savings account today? Assume that the savings account pays 6% and it is compounded quarterly

c. Winner Lei is thinking of buying a miniature golf course. It is expected to generate cash flows of $40,000 per year in years 1, $50,000 per year in year 2 and year 3. If the appropriate discount rate is 10%, what is the present value of these cash flows?

d. Suppose you win a lottery and under the terms of the lottery, you will receive $250,000 per year for the next 25 years. If the rate of interest is 12% per year, how much is the present value of your winnings?

e. What is the present value of $27 received at the end of each year for 5 years?Assume a discount rate of 9%. The first payment will be received one year from today ?

f. Tamika wins a lottery and under the terms, she will receive $100,000 per year forever. If the rate of interest is 20% per year, how much is the present value of her winnings?

Reference no: EM131906614

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