1. What amount comes closest to the present value of a 15-year annuity (a total
ID: 2735580 • Letter: 1
Question
1. What amount comes closest to the present value of a 15-year annuity (a total of 15 consecutive payments) of $550 paid at the end of each year that does not begin until the end of the fourth year? Use an interest rate of 6%.
$8,250
$4,950
$5,350
$5,900
$4,485
2. Currencies – U.S. dollar foreign-exchange rates. May 5, 2011
Country/currency………..in US$..............per US$
British Pound……………….1.5347…………….0.6516
Norwegian Kroner……….0.1690……………..5.9173
Thai Baht……………………..0.0310……………..32.250
The price of an ounce of gold in New York is $1,950, and the price of the same ounce of gold in London is 1,285 British Pounds. Using the exchange rates above, what would you predict would occur in well-functioning markets based upon this information?
The price of gold will fall in New York and will stay the same in London
The price of gold will rise in New York and will stay the same in London
The price of gold will stay the same in both New York and London
The price of gold will rise in New York and fall in London
The price of gold will fall in New York and rise in London
a.$8,250
b.$4,950
c.$5,350
d.$5,900
e.$4,485
Explanation / Answer
1.
PV=550/1.06^4+550/1.06^5+550/1.06^6+550/1.06^7+550/1.06^8+550/1.06^9+550/1.06^10+550/1.06^11+550/1.06^12+550/1.06^13+550/1.06^14+550/1.06^15+550/1.06^16+550/1.06^17+550/1.06^18
=4485
we only do one question at a time as per Chegg guidlines. please ask second question again.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.