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FIN 301 - HW#1

The account pays an interest rate of 3 how much money

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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 4-24. 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 4-32. 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 30-year 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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