A local bank advertises the following deal: “Pay us $100 a year for 10 years and then we will pay you (or your beneficiaries) $100 a year forever.” Is this a good deal if the interest rate available on other deposits is 8 percent? 2. Consider an APR of 12% with monthly compounding. What is the EAR (effective annual rate)?
A local bank advertises the following deal: “Pay us $100 a year for 10 years and then we will pay you (or your beneficiaries) $100 a year forever.” Is this a good deal if the interest rate available on other deposits is 8 percent? 2. Consider an APR of 12% with monthly compounding. What is the EAR (effective annual rate)?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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A local bank advertises the following deal: “Pay us $100 a year for 10 years and then we will pay you (or your beneficiaries) $100 a year forever.” Is this a good deal if the interest rate available on other deposits is 8 percent?
2. Consider an APR of 12% with monthly compounding. What is the EAR (effective annual rate)?
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