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Unformatted text preview: rate of 3%. How much money will
be in the account on your 18th birthday immediately after your grandmother makes the deposit on
that birthday? CF0=1000, Nj=17, I=3%, NPV=13561.10
PV=13561.10, N=17, I=3, FV=22414.44 +1000 = $23,414.44 424. A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year
and will be $1000. Each year after that, you will receive a payment on the anniversary of the last
payment that is 8% larger than the last payment. This pattern of payments will go on forever. If
the interest rate is 12% per year,
a. Whatisody’vluefbq? 1000/(.12.08)= $25,000
432. You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that
you can use as a down payment on the house, but you need to borrow the rest of the purchase
price. The bank is offering a 30year mortgage that requires annual payments and has an interest
rate of 7% per year. What will your annual payment be if you sign up for this mortgage? PV=300000, I=7%, N=30, PMT= 24,...
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 Spring '14
 CarlMagiocomo
 Corporate Finance, Future Value

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