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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
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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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= EAR =
Transcribed Image Text: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= EAR =
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