Answer:
False
Explanation:
A certificate of Deposit or CD is a deposit made into a bank for a specific time. This deposit will earn a fixed interest rate that varies upon the days the deposit is made of. The rule is: Longer the days of the deposit, longer the interest rate paid.
Answer:
Lump sum payment today =$6,659,388.81
Explanation:
The lump sum payment that would make her indifferent is the present value of the annuity discounted at the required rate of return of 5%.
PV = A × (1 - ((1+r)^(-n))/n)
A- $450,000, r- 5%, n = 25-1 = 24
<em>Because , the first payment occurs today, we wil take the number of payment to be 24 (i.e 25 - 1) . And then add the first payment to the Present value the of the 24 year annuity. </em>
<em>This is so because the first payment need not be discounted because it is already in present value.</em>
PV = $450,000 × 1- (1.05)^(-24)/0.05
= 6,209,388.81
Total Present value = $450,000 + 6,209,388.81
= $6,659,388.81
Answer:
6%
Explanation:
sales tax 2.10 divided by shirt cost will give you the sales tax rate
2.10/34.99 = .0600 or 6%
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