Music producer, will receive royalties over a period of 3 years for the theme song she madefor a TV program. The amount will be received at the end of each year as follows.End of Year 1End of Year 2End of Year 3AmountR50 000R30 000R10 000Find the present value (at the beginning of the first year) of all future royalties at a compoundinterest rate of 8% pa.A. R71 444B. R79 955C. R82 865D. R90 000

The present value of any amount to be received in the future is generally lesser than the future…

Answered: Music producer, will receive royalties…

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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Similar questions

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A family has taken out a mortgage of £450,000 to purchase a house on 1.1.2022. The mortgage is repaid in monthly instalments at the beginning of each month over 20 years.(a) Determine the monthly payment amount assuming an effective interest rate of 1.6% per annum.(b) After having made 5 years of payments the family takes out a new mortgage with an effective interest rate of 6% per annum for the remaining 15 years. Payments are made monthly in arrears. Determine the new monthly payment amount.(c) If the family would have originally agreed to make monthly instalments of £2,000 paid at the beginning of each month starting on 1.1.2022, when would they have paid off the loan? Assume an effective interest rate of 1.6% per annum throughout.
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