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Unformatted text preview: ars old and are allowed to withdraw the money for the first time. The account currently has
$3996 in it and pays an 8% interest rate.
PV=396,N7I8F4. b. Whatifyoulemnr65bthda?
PV=396,N47I8F1.2 c. wHomuchneydirgaftlpuhecon? FV=3996, N=18, I=8, PV=-1000
4-14. You have been offered a unique investment opportunity. If you invest $10,000 today, you will
receive $500 one year from now, $1500 two years from now, and $10,000 ten years from now. a. WhatiseNPVofpruny ta%eis6?Shouldykprtn
No,yushldntakeiprbc gvNPV. b. WhatiseNPVofpruny taeis2%?Shouldyknw
Yes,youhldinvtprwesabcuithpovNPV. 4-18. The British government has a consol bond outstanding paying £100 per year forever. Assume the
current interest rate is 4% per year.
(10/4%)+=£26 b. Whatisevluofbndmyrapetis?
10/4%=£25 4-23. Your grandmother has been putting $1000 into a savings account on every birthday since your
first (that is, when you turned 1). The account pays an interest...
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