What is the most you could spend this year

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Reference no: EM131830483

1. Today is your 20th birthday. A trust fund was recently set up for you that will pay $159,300.00 in one year when you turn 21, $170,800.00 when you turn 25, and $219,800.00 when you turn 30. If the bank is willing to lend money to you at a 9.00% annual interest rate, what is the most you could spend this year? (Assume that the bank will loan you the full PV of your trust.)

Answer Format: Currency: Round to 2 decimal places.

2. A new start-up company promises to pay an investor each quarter for the next two years. The company will pay $22,575.00 per quarter for the first four quarters, and then $26,925.00 per quarter for the following four quarters. If the investor wants an 8.92% APR return with quarterly compounding, what is the value of the investment opportunity today?

Answer Format: Currency: Round to: 2 decimal places.

Reference no: EM131830483

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