This preview shows pages 1–7. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: paid cash? – Draw the time line. 4 Annuity Due • You are buying a house. The seller will accept nine, $50,000 annual payments beginning today based on an interest rate of 5% or the equivalent amount today in cash. What would the house cost if you paid cash? 5 Another Annuity Due Example… • If you land a big account, you’re promised a $4,000 annual bonus for the next three years. You’d get the first payment right away, save all the bonuses, and earn 10%. How much will you have at the end of three years? 6 Another Annuity Due Example… • If you land a big account, you’re promised a $4,000 annual bonus for the next three years. You’d get the first payment right away, save all the bonuses, and earn 10%. How much will you have at the end of three years? 7...
View
Full
Document
This note was uploaded on 01/24/2012 for the course FIN 4260 taught by Professor Victorwakeling during the Spring '12 term at Kennesaw.
 Spring '12
 VictorWakeling
 Annuity

Click to edit the document details