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Unformatted text preview: many years will it take to double your balance? 2.5 You are about to borrow $5,000 from a bank at an interest rate of 9% compounded annually. You are required to make five equal annual repayments in the amount of $1,285.46 per year, with the first repayment occurring at the end of year one. For each year, show the interest payment and principal payment. 2.8 Which of the following alternatives would you choose, assuming the interest rate of 8% compounded annually? Alternative 1: Receive $100 today; Alternative 2: Receive $120 two years from now. 2.10 State the present worth of the following future payments: a) $4,500 6 years from now at 7% compounded annually. 2.17 If $1000 is invested now, $1,500 two years from now, and $2,000 four years from now at an interest rate of 8% compounded annually, what will be the total amount in 10 years?...
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- Spring '12