1. Suppose 20 years ago your mother deposited $ 2500 in an account earning 12% annually. Obtain today's value.
a. 24,115.73
b.24,116.73
c.24,117.73
d.24,118.73
e. None of the above
2. Suppose 20 years ago your mother deposited $ 2500 in an account earning 12%. After 10 years she withdrew $ 1,000. Obtain today’s value.
a. 21,007.88
b. 21,008.88
c. 21,009.88
d. 21,010.88
e. None of the above
3. What is the present value of a consol, assuming it offers $ 20 at the end of every year for ever and k = 8%?
a. 20
b. 160
c. 250
d. 400
e. None of the above
4. Suppose you need $ 20,000 to buy a new car in 5 years. Assume that you use an account earning 10%. What do you have to deposit today?
a. 12,414. 43
b. 12,416.43
c. 12,418.43
d. 12,420.43
e. None of the above