FIN 370 Course Great Wisdom / tutorialrank.com FIN 370 Course Great Wisdom / tutorialrank.com | Page 15

5-5 Present Value Compute the present value of a $2,000 deposit in
year 1 and another $1,500 deposit at the end of year 3 if interest
rates are 10 percent.
5-7 Present Value of an Annuity What’s the present value of a $900
annuity payment over five years if interest rates are 8 percent?
5-12 Present Value of an Annuity Due If the present value of an
ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent,
what’s the present value of the same annuity due?
5-15Effective Annual Rate A loan is offered with monthly payments
and a 10 percent APR. What’s the loan’s effective annual rate (EAR)?
5-39 Loan Payments You wish to buy a $25,000 car. The dealer offers
you a 4-year loan with a 9 percent APR. What are the monthly
payments? How would the payment differ if you paid interest only?
What would the consequences of such a decision be?
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FIN 370 Week 2 Financial Markets and Institutions Report (2
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FIN 370 Week 2 Financial Markets and Institutions Report