In: Finance
Answer all. Don't answer just one! If you can't answer all then
don't answer just one.
14. You have accumulated $1,269.28 in credit card
debt. Your interest rate is 14.75% per year and you will pay it off
in 55 months. what will be your monthly payment?
15. You won the lottery. The money is paid in
equal annual installments of $68,375 over 13 years beginning today.
If the appropriate discount rate is 4.31%, how much is the
sweepstakes actually worth today?
16. You won the lottery. The money is paid in
equal annual installments of $58,666 over 21 years. If the
appropriate discount rate is 4.45%, how much is the sweepstakes
actually worth today?
17. Your grandfather has some extra money lying
around and he is considering investing in something that will pay
$12,929 per year in perpetuity. If the required return is 6.55%,
how much should he be willing to pay for it today?
18. State Streeet has preferred shares that pay
$1.95 per year. If the required return is 2.34%, what is the fair
price of the stock?