What is the present value of $40 earned 2-years
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a) What is the present value of $40 earned 2-years from now if compounding was semi-annual and the interest rate is annually 3%?
b) A “black box” just paid $20, which is expected to grow by 3% when the interest rate is 7% forever, what is the present value of this “black box”?
c) What is the future value of an annuity due with a $15 cash flow, 4% annual interest with quarterly compounding 3-years from now?
d) If the monthly interest rate is 0.5%, then what is the effective annual rate? What is the stated annual rate?
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