The Good Life Insurance Co. wants to sell you an annuity which will pay you $531 per quarter for 24 years. You want to earn a minimum rate of return of 5.57 percent APR. What is the most you are willing to pay as a lump sum today to buy this annuity?
The Great Giant Corp. has a management contract with its newly hired president. The contract requires a lump sum payment of $37,723,793 to be paid to the president upon the completion of her first 14 years of service. The company wants to set aside an equal amount of funds at the end of each year to cover this anticipated cash outflow. The company can earn 6.97 percent on these funds. How much must the company set aside each year for this purpose?
Todd is able to pay $192 a month for 7 years for a car. If the interest rate is 4.62 percent APR, how much can Todd afford to borrow to buy a car?
You are expecting a project to produce the following cash flows for years 1 through 4 respectively: $1,564, $1,220, $1,639, $1,965. If the appropriate discount rate is 14 percent, how much would you be willing to pay for it today?