A rich aunt has promised you $2,810.00, one year from today. In addition, each year after...

A rich aunt has promised you $2,810.00, one year from today. In addition, each year after that , she has promised a payment (on the anniversary of the last payment) that is 4.00% larger than the last payment. She will continue to show this generosity for 25 years, giving a total of 25 payments. If the interest rate is 10.00%, what is her promise worth today?

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

A rich aunt has promised you $5000 one year from today. In addition, each year after...

A rich aunt has promised you $5000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 5% larger than the last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments. If the interest rate is 5%, what is her promise worth today?

A rich aunt has promised you $6,000 one year from today. In addition, each year after...

A rich aunt has promised you $6,000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 3% larger than the last payment. She will continue to show this generosity for 20years, giving a total of 20 payments. If the interest rate is 9%, what is her promise worth today? The present value of the aunt's promise is?

A rich aunt has promised you $3,000 one year from today. In addition, each year after...

A rich aunt has promised you $3,000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 3% larger than the last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments. If the interest rate is 9%, what is her promise worth today?

A rich aunt has promised you $3,000 one year from today. Inaddition, each year after that,...

A rich aunt has promised you $3,000 one year from today. Inaddition, each year after that, she has promised you a payment(on the anniversary of the last payment) that is 3% larger than the last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments. If the interest rate is 8%, what is her promise worth today?

A rich aunt has promised you $3,000 one year from today. In addition, each year after...

A rich aunt has promised you $3,000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 2% larger than the last payment. She will continue to show this generosity for 2020 years, giving a total of 2020 payments. If the interest rate is 4%, what is her promise worth today?

A rich aunt has promised you $ 4000 one year from today. In addition, each year...

A rich aunt has promised you $ 4000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 4 % larger than the last payment. She will continue to show this generosity for 20myears, giving a total of 20 payments. If the interest rate is 4 % , what is her promise worth today?

Your rich aunt offers you the choice of 3 pay-outs today Choice 1 : $1000 paid...

Your rich aunt offers you the choice of 3 pay-outs today Choice 1 : $1000 paid every year for 5 years, with the first payment to be received at the end of year 3 Choice 2 : $300 paid today Choice 3 : $80 paid at the end of each month for 5 years, with the first payment to be received in a month (a) What is the effective annual interest rate would make you indifferent between choice 2 and...

You are promised $10,000 a year for six years after which you will receive $5,000 a...

You are promised $10,000 a year for six years after which you will receive $5,000 a year for six years. If you can earn 8 percent annually, what is the present value of this stream of payments? Show how to solve in Excel, Step-By-Step

You are promised a cash flow every year forever! Next year you will receive $100. After...

You are promised a cash flow every year forever! Next year you will receive $100. After that, the payment will grow by 1% compounded annually. There is no risk associated with the payments. You can invest and earn a risk-free rate of return of 5%. What is the present value of the perpetuity?

Gabriela inherits money from her aunt. She gets $100,000 from her aunt, today. She have exactly...

Gabriela inherits money from her aunt. She gets $100,000 from her aunt, today. She have exactly 20 years to retire and she decided to put the entire amount into 20 years, 4% annual interest annuity.” A. The answer to this problem is $219,112.31. A total principle of $100,000.00 and total interest of $119,112.31. Show work with finance formulas like annuity step by step for this problem to get this answer. b.Next assume that in addition to this initial $100,000, she...

Subjects