Question

In: Finance

Round all answers to the 2 decimal place a. Derek will deposit $5,859.00 per year for...

Round all answers to the 2 decimal place

a. Derek will deposit $5,859.00 per year for 11.00 years into an account that earns 5.00%, The first deposit is made next year. How much will be in the account 45.00 years from today?

b. Derek will deposit $1,907.00 per year for 18.00 years into an account that earns 11.00%, The first deposit is made next year. He has $15,588.00 in his account today. How much will be in the account 46.00 years from today?

c. Derek will deposit $1,880.00 per year for 15.00 years into an account that earns 13.00%. Assuming the first deposit is made 4.00 years from today, how much will be in the account 30.00 years from today?

d. What is the value today of receiving $2,416.00 per year forever? Assume the first payment is made next year and the discount rate is 15.00%.

e. What is the value today of receiving $2,740.00 per year forever? Assume the first payment is made 7.00 years from today and the discount rate is 12.00%.

f. Suppose you deposit $2,743.00 into an account today that earns 14.00%. In 15.00 years the account will be worth $________.

Expert Solution

a.

Given,

Annual deposits (A) = $ 5859

Period of annual deposits (n₁) = 11 years

Interest rate (r) = 5% or 0.05

Total period = 45 years

Rest of the period (n₂) = Total period - period of annual deposits

= 45 years - 11 years = 34 years

Solution :-

jeff jeffy answered 11 months ago

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