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What is the present value of this investment

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Reference no: EM131041432

You win a scratch off lottery ticket that promises to pay an initial payment of 10,000 this year and grow at a rate of 5% forever. If the discount rate is 8%, what is the present value of this investment?

  • $350,000.00
  • $400,000.00
  • $300,000.00
  • $500,000.00
  • None of the above

Suppose that you buy a car which requires that you make the first payment on the day that you buy it in order to drive it off the lot. The payments are $505 per month. What was the sticker price of the car if the monthly interest rate is 1.5% (periodic rate) and it takes 4 years (48 months) to pay off the car?

  • $17,449.36
  • $17,191.49
  • $35,130.44
  • $35,657.39
  • None of the above

Reference no: EM131041432

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