You will save all payments in the bank which pays a rate 6


Time Value of Money

  • ?  Suppose that you won a lottery that pays $10,000 every year for 20 years starting in 5 years (ie first payment is at the end of year 5).
  • ?  You will save all payments in the bank which pays a rate 6% per year.
    1. How much you will have in year 24?
    2. How much you would have to put in the bank today in order to have the same amount of money in year 24?

 

 

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Finance Basics: You will save all payments in the bank which pays a rate 6
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