Assignment Help >> Financial Management
1) You have decided to open up a savings account. Your bank has offered you three interest options: A) 10.55% annually, B) 10.40% quarterly and C) 10.30% weekly. Which do you prefer?
2) What is the present value of $1,000 a month to be received for the next 50 years with an interest rate of 8.0% compounded monthly?
3) What is the present value of $12,000 a year to be received for the next 50 years with an interest rate of 8.0%?
4) You just won the Powerball, as a result you have the choice between taking $250 million today or taking a 20-year annuity. Interest rates are expected to hold at 3.75% over the next 20-years. How much would the annuity need to be annually for you to be indifferent between cash now or taking the annuity?
5) (Bonus Question – 5 points) What is the present value of $25,000 received in 10 years if interest rates are 6.5% with continuous compounding?