{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter5

# Chapter5 - Name:NguyenXuanThanh Class Wed afternoon...

This preview shows pages 1–2. Sign up to view the full content.

Name: Nguyen Xuan Thanh Class: Wed. afternoon Student ID: 1235735 CHAPTER5 Questions 5.4/ Would you rather have a savings account that pay 5% interest compounded semiannually or one that pay 5% interest compounded daily? Explain I would rather have a savings account that pays 5% interest compounded daily. Because I would earn more “interest on interest”. 5.5/ To find the present value of an uneven series of cash flows, you must find the PVs of the individual cash flows and then sum them. Annuity procedures can never be of use, even when some of the cash flows constitute an annuity because the entire series is not an annuity. True or false? Explain. False. One can find the present valueof an embedded annuity and add this PV to the PVs of the other individual cash flows to determine to the present value of the cash flow stream. Problems 5.3/ FINDING THE REQIURED INTEREST RATE Your parents will retire in 18 years. They current have %250,000, and they think they will need \$1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don’t save any additional funds? With a financial calculator enter the following: N=18, PV= -250000, FV=1000000 and PMT=0.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 5

Chapter5 - Name:NguyenXuanThanh Class Wed afternoon...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online