The discount rate is 15%.
The cash flows will be $10 million for 15 years and then grow at a rate of 5% per year,
but will die at the end of 30 years (in total). What is the present value?
Write your answer in numerals without a $ sign. Use 2 decimal points (cents) if
appropriate
65,122,090.99
Question 6
0 / 5 pts
The payments described below are compounded monthly.
Suppose you borrow $25,000 on Sept 1, 2006, and another $25,000 on Sept 1, 2007
to finace the portion of tuition and living expenses for graduate school for which your
savings are insufficient. Repayment on each of these loans ids deferred until
graduation. However, interest of 6.5% (quoted APR) begins accuring immediately
(compounded monthly). The fist payment is due Spet 1, 2008. The loan agreement
specifies that they loan be repaid in 120 equal monthly installments.
A. What will be the total value of your indebtedness on August 31, 2008 (Assume
interest for the last month has accrued but no payments have yet been made) will be
54,837.98
B. The monthly payment will be 622.08