Q3. It will cost $20,000 a year for four years when an 8-year old child is ready for college. How much should be invested today if the child will make the first of four annual withdrawals 10-years from today? The expected rate of return is 8%. A) $66,243. B) $30,683. C) $33,138. Q4. An investor who requires an annual return of 12% has the choice of receiving one of the following: A. 10 annual payments of $1,225.00 to begin at the end of one year. B. 10 annual payments of $1,097.96 beginning immediately. Which option has the highest present value (PV) and approximately how much greater is it than the other option? A) Option A's PV is $42 greater than option B's. B) Option B's PV is $114 greater than option A's. C) Option B's PV is $27 greater than option A's. | 
发表于 2008-12-29 17:45
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