When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $6. Based on actuarial tables, "Joltin' Joe" could expect to live for 36 years after the actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of the flowers will increase at 4.7 percent per year, when expressed as an EAR. Assuming that each year has exactly 52 weeks, what is the present value of this commitment? Joe began purchasing flowers the week after Marilyn died.
When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $6. Based on actuarial tables, "Joltin' Joe" could expect to live for 36 years after the actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of the flowers will increase at 4.7 percent per year, when expressed as an EAR. Assuming that each year has exactly 52 weeks, what is the present value of this commitment? Joe began purchasing flowers the week after Marilyn died.
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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Transcribed Image Text:When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on
her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of
fresh flowers that the former baseball player thought appropriate for the star cost about
$6. Based on actuarial tables, "Joltin' Joe" could expect to live for 36 years after the
actress died. Assume that the EAR is 11.4 percent. Also, assume that the price of the
flowers will increase at 4.7 percent per year, when expressed as an EAR. Assuming that
each year has exactly 52 weeks, what is the present value of this commitment? Joe
began purchasing flowers the week after Marilyn died.
Multiple Choice
$4,622.31
O $4,712.06
$4,353.04
€4.963.20
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