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Your uncle promises to give you $600 per quarter for the next five years. How much is his promise worth right now of the interest rate is 0.10

Your uncle promises to give you $600 per quarter for the next five years. How

much is his promise worth right now of the interest rate is 0.10 compounded

quarterly?

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The solution is... View the full answer

5 comments
  • Future value = Amount (1+ quarterly interest rate)^number of quarters
    • teaching123
    • May 07, 2016 at 12:02pm
  • = 600*(1+0.025)^20 = 600*(1.025)^20 = 600*1.6386 = 983.16
    • teaching123
    • May 07, 2016 at 12:03pm
  • sorry it will be Future value = Amount /interest rate[(1+ quarterly interest rate)^number of quarters - 1] = 600/0.025[1.6386 - 1] = 24000*0.6386 = 15326.40
    • teaching123
    • May 07, 2016 at 12:06pm
  • Earlier I have made mistake in formula, hope you will understand. Please ask for any clarification.
    • teaching123
    • May 07, 2016 at 12:06pm
  • Present value of promise = 600 PVAF(2.5%,20) = 600*15.589 = 9353.40
    • teaching123
    • May 07, 2016 at 12:11pm

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Other Answers

600x0.10x1/4x5... View the full answer

Amount of promise worth right now =pv(rate,nper,pmt,fv)... View the full answer

600( 1+0.1) ^ 20 = 4036.49 if the interest rate... View the full answer

FV=PV(1+i) n     PV= present value  FV=... View the full answer

600(1-(1.001)^_... View the full answer

1 comment
  • correct answer quarterly rate = 0.025 pv= 600(1-(1+0.025)^-20/0.025) =9353.4974
    • Enoma
    • May 07, 2016 at 1:41pm

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