# You plan to deposit \$900 in a bank account now and \$100 at...

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Lab 1 1. You plan to deposit \$900 in a bank account now and \$100 at the end of one year. If the account earns 5% interest per year, what will the balance be in the account right after you make the second deposit?
2. You have just received a windfall from an investment you made in a friend’s business. She will be paying you \$60,000 at the end of this year, \$120,000 at the end of next year, and \$180,000 at the end of the year after that (three years from today). The interest rate is 16.0% per year. a. What is the present value of your windfall b. What is the future value of your windfall in three years (on the date of the last payment)?
FV= 256,222 x( 1+0.160)^3 =\$399,936 Or n=3 i/y=16 pv=256,222 pmt=0 fv=-399,936 3. You have decided to buy a perpetual bond. The bond makes one payment at the end of every year forever and has an interest rate of 11%. If the bond initially costs \$6,000, what is the payment every year?