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What will be the value of the investment in two years

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Q1. You're assessing a growing perpetuity product from a large finance services firm. The product promises an initial payment of $20,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.04 annually. If you use a discount rate of 0.07 for investment products, what is the present value of this growing perpetuity? Round to two decimal places.

Q2. A coworker has asked you for help with choosing an investment. She has $5,700 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0500 annually with the interest being paid quarterly. What will be the value of the investment in two years? Round to two decimal places.

Reference no: EM132561830

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