This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: 6) You will receive $500 starting this year and will be paid this every year for 10 years (last $500 payment at t=10). After this, you will be paid $100 forever. If the interest rate is 5% p.a., what is the present value of these cash flows? 7) You are trying to save money for retirement. You wish to have $100,000 in your retirement account in 25 years. You plan on doing this by making equal deposits into your savings account each year starting today. If the interest rate is 4% p.a., how much do you need to deposit each year? 8) You plan on saving money for retirement in 30 years (t=30) at which time, you wish to have saved $1,000,000. In order to do this you plan on depositing $10,000 into the bank for 10 years starting next year (last $10,000 deposit at t=10). And then deposit $x every year after that until your retirement day (last deposit of $x at t=30). If the interest rate is 6% p.a., what is the $x you must deposit?...
View Full
Document
 Fall '11
 ToddStotnitch
 Corporate Finance, Interest, Interest Rate

Click to edit the document details