You are offered a court settlement in the following terms: you will receive 4 equal payments of $7,958 each every year, with the first payment being made 3 years from now. The current annual interest rate is 4%. Assume yearly compounding. What is this settlement worth in present value terms? Enter your answer in the form of dollars, rounded to the nearest cent, and without the dollar sign ('$').

You are offered a court settlement in the following terms: you will receive 4 equal payments of $7,958 each every year, with the first payment being made 3 years from now. The current annual interest rate is 4%. Assume yearly compounding. What is this settlement worth in present value terms? Enter your answer in the form of dollars, rounded to the nearest cent, and without the dollar sign ('$').

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

If you borrow $1700 and agree to repay the loan in sux equal annual payments at an interest rate of 11%, what will your payment be? what will your oayment be if you make the first payment on the loan immediately instead of at the end of the first year?
Suppose you have $1,000 and plan to purchase a 1-year certificate of deposit (CD) that pays 0% interest, compounded annually. How much will you have when the CD matures?
You plan to borrow $25,000 at a 3.4% annual interest rate compounded annually. The terms require you to amortize the loan with 5 equal payments each made at the end of each year. You would like to construct an amortization schedule showing details of the payments. Answer the following questions, and choose the closest answer from the possible choices following each question: 1.To find the interest repaid in period 1 only in the financial calculator amortization worksheet, you enter P2 = 2.To find the interest repaid in period 1 only in the financial calculator amortization worksheet, you enter P1 = 3.How much total interest is repaid in periods 1 to 2?
a. If you borrow $2,200 and agree to repay the loan in five equal annual payments at an interest rate of 12%, what will your payment be? b. What will your payment be if you make the first payment on the loan immediately instead of at the end of the first year?
Suppose you invest in an annuity that pays 6% interest, compounded annually. You contribute $4,500 each year for 10 years, what is the value of the annuity at the end of 10 years? Enter your answer rounded to the nearest hundred dollars. Omit the dollar sign and comma ($42,570.21 should be entered as 42600.)
a. If you borrow $1,100 and agree to repay the loan in six equal annual payments at an interest rate of 11%, what will your payment be? b. What will your payment be if you make the first payment on the loan immediately instead of at the end of the first year?
3) You are loaned $10, 000 at an effective annual interest rate of i = 7% and agree to pay this back by paying 300% of each year' interest ar the end of each year. When does the outstanding balance first fall below $2,000?
Assume an effective compound interest rate i = 8% per annum. Compute the following equivalent rates. In each case, enter your answer as a percentage. a) The nominal interest rate payable semi-annually 数字 Enter an answer correct to 4 decimal places. % b) The effective interest rate payable quarterly 数字 Enter an answer correct to 2 decimal places. % c) The effective rate of discount per annum 数字 Enter an answer correct to 2 decimal places. % d) The nominal rate of discount payable monthly 数字 Enter an answer correct to 4 decimal places. %
Imagine you borrow $490 from your roommate, agreeing to pay her back $490 plus 7 percent nominal interest in one year. Assume inflation over the life of the contract is expected to be 4.49 percent. What is the total dollar amount you will have to pay her back in year? What percentage of the interest payment is the result of the real rate of interest? (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 17.54 or 17.54%.)
What is the present worth of a two-part legal settlement if the interest rate is 4%? $100,000 is received at the end of Year 1 and $400,000 at the end of Year 5.
What is the future value of $650 deposited for one year earning an 10 percent interest rate annually? (Do not round intermediate calculations. Enter your answer as a whole number.)
If you borrow $2800 and agree to repay the loan in 5 equal annual payments at an interest rate of 12%, what will your payment be if you make the first payment immediately instead of at the end of the first year?

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