Unformatted text preview: at Year 0 of $7,500.00, while Perpetuity 2 has equivalent cash flows in Years 31 through infinity and a value at Year 30 also of $7,500.00. Also assume that a 30-Year annuity with equivalent cash flows in Years 1 through 30 has a future value of $92,007.59 at Year 30. Given this information, determine the amount of the perpetuity/annuity payment in each year. (Hint: you first have to determine the nominal, annual interest rate that is being used in this problem.) A. $750.00 B. $725.00 C. $700.00 D. $675.00 E. $650.00 21. Assume that an investment will make 46 payments in Years 0 - 45, with the first payment in Year 0 equal to $250.00 and each subsequent payment growing at a 10 percent rate (that is, Year 1 = $275.00, Year 2 = $302.50, etc.). Determine the present value of these payments at Year 0 if the discount rate is 18 percent. A. $4,249.86 B. $3,541.54 C. $4,604.02 D. $3,895.70 E. $4,958.16...
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- Spring '06
- Time Value Of Money, Mathematical finance, a. b. c., b. c. d., C. D. E.