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Find the present values of the following cash flow streams at 8% compounded annually. 1 2 3 4 5 $0 $0 Stream A $100 $400 $400 $400 $300 Stream B $300 $400 $400 $400 $100 b. What are the PVs of the streams at 0% compounded annually?

Find the present values of the following cash flow streams at 8% compounded annually. 1 2 3 4 5 $0 $0 Stream A $100 $400 $400 $400 $300 Stream B $300 $400 $400 $400 $100 b. What are the PVs of the streams at 0% compounded annually?

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
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* l 48% 2:55 pm Document (52) ment Time verue of Money -18 UNEVEN CASH FLOW STREAM Find the present values of the following cash flow streams at 8% compounded annually. a. 1 2 + $400 3 4 5 $0 $0 Stream A $100 $400 $400 $300 Stream B $300 $400 $400 $400 $100 b. What are the PVs of the streams at 0% compounded annually? S-19 FUTURE VALUE OF AN ANNUITY Your client is 40 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average retum of 9% in the future. a. If she follows your advice, how much money will she have at 65? b. How much will she have at 70? c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to eam the same rate, how much will she be able to withdraw at the end of each year aftor retirement at each retirement age?:ndows G
Transcribed Image Text:* l 48% 2:55 pm Document (52) ment Time verue of Money -18 UNEVEN CASH FLOW STREAM Find the present values of the following cash flow streams at 8% compounded annually. a. 1 2 + $400 3 4 5 $0 $0 Stream A $100 $400 $400 $300 Stream B $300 $400 $400 $400 $100 b. What are the PVs of the streams at 0% compounded annually? S-19 FUTURE VALUE OF AN ANNUITY Your client is 40 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average retum of 9% in the future. a. If she follows your advice, how much money will she have at 65? b. How much will she have at 70? c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to eam the same rate, how much will she be able to withdraw at the end of each year aftor retirement at each retirement age?:ndows G
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