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- Walter is investing $5,000in an account paying 6.75 percent annually for three years. What is the interest-on-interestif interest is compounded?Hint: Find the interest earned using compound interest and simple interest. The difference between them isyour answer.Sasha owns two investments, A and B, that have a combined total value of 41,800 dollars. Investment A is expected to pay 24,700 dollars in 3 year(s) from today and has an expected return of 3.64 percent per year. Investment B is expected to pay 31,827 in 4 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? (Answer as an annual rate in decimal format so that 12.34% would be entered as 0.1234 and 0.98% would be entered as 0.0098.)Justin invests $2000 at time 0. He receives $6443 at time 1 and pays $4500 at time 2. Compute the Net Present Value of his investment at an effective annual rate of interest of 3%. Possible Answers A 11.25 B 12.29 D E 13.66 14.38 15.41
- Suppose Kay inherits $250,000, which she invests today at a rate of return of 9 percent compounded annually. How much will Kay's investment be worth in 25 years?Assume that a couple invests $1000 upon the birth of their daughter. Assume that the investment earns 6.8% compounded annually. What will the investment be worth on the daughter’s 18th birthday?Roy is going to receive a payment of $5,000 one year from today. He earns an average of 6% on his investments. What is the present value of this payment?
- Salvatore has the opportunity to invest in a scheme which will pay $5,000 at the end of each of the next 5 years. He must invest $10,000 at the start of the first year and an additional $10,000 at the end of the first year. What is the present value of this investment if the interest rate is 3%?If Ormondo invested $7000 at 6.75% for a 10 year period, how much interest rate will he have earned?If the Alfa Life Insurance Co. will pay you and your heirs $1 at the beginning of each year forever, how much will you pay for the policy assuming the required return on this investment is 1 percent?