How long will it take him to pay off debt

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Reference no: EM131981191

1. Compute the present value of $900 paid in three years using the following discount rates: 6 percent in the first year, 7 percent in the second year, and 8 percent in the third year.

2. Joey realizes that he has charged too much on his credit card and has racked up $3000 in debt. If he can pay $150 each month and the card charges 18 percent APR (compounded monthly), how long will it take him to pay off the debt?

3. Which would you prefer: $50,000 today, $100,000 ten years from now, or $150,000 twenty years from now? Answer this question in the face of each of three different scenarios: annual interest rates of 3%, 5%, and 7%.

Reference no: EM131981191

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