Suppose you just bought an annuity with 10 annual payments of $16,000 at the current interest rate of 12.5 percent per year.
What is the value of the investment at the current interest rate of 12.5 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Value of investment $
What happens to the value of your investment if interest rates suddenly drop to 7.5 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Value of investment $
What happens to the value of your investment if interest rates suddenly rise to 17.5 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Value of investment