3. An investment pays $7,000 per year forever, with the first payment occurring 15 years from now. If the appropriate annual discount rate is 6.5%, what is the investment worth today? 4. You want to buy a new sports car that costs $86,500, and the finance office at the dealership has quoted you a 4.9% APR loan for 60 months to buy the car with a $2,000 down payment (tha is, you pay $2,000 initially and borrow the rest). What will your monthly payments be? What is the effective annual rate (EAR) on this loan? Monthly pmt=

3. An investment pays $7,000 per year forever, with the first payment occurring 15 years from now. If the appropriate annual discount rate is 6.5%, what is the investment worth today? 4. You want to buy a new sports car that costs $86,500, and the finance office at the dealership has quoted you a 4.9% APR loan for 60 months to buy the car with a $2,000 down payment (tha is, you pay $2,000 initially and borrow the rest). What will your monthly payments be? What is the effective annual rate (EAR) on this loan? Monthly pmt=

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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