Unformatted text preview: off? 5. First simple Bank pays 7% simple interest on its investment accounts. If First Complex Bank pays interest compounded annually, what rate should First Complex set if it wants to match First Simple over a 10 year horizon? 6. You want to buy a new car that costs $48,000. The dealer offers you a 60-month annuity due with a 7.45% APR. What is your monthly payment? 7. Ann is going to receive a 30-year annuity of $8,000. Elaine is going to receive a perpetuity of $8,000. If the discount rate is 9%, how much more is Elaine’s cash flow worth?...
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- Spring '11
- Economics terminology, annual cash flow, equal annual deposits, Practice Dr. Lucy