Session:9 Time Value of Money III: Unequal Multiple Payment Values
Review Questions
Principles of Finance | Leadership Development – Micro-Learning Session
Rice University 2020 | Michael Laverty, Colorado State University Global Chris Littel, North Carolina State University| https://openstax.org/details/books/principles-finance
General instructions: Approximations and minor differences because of rounding are acceptable. Ignore the effect of taxes. Please assume that all percentages are annual rates and compounding occurs annually unless otherwise indicated.
1. Refer to Question 3 above. Solve using the financial calculator, documenting your steps/keystrokes.
2. Refer to Question 7 above. Solve using the financial calculator, documenting your steps/keystrokes.
3. You agree to repay a loan over five years with the following stream of cash payments: $1,000; $1,100;
$1,250; $1,280; and $1,300. If you wish to discount these payments to their present value today using 4%,
why can you not use one annuity calculation, as seen in previous chapters?
2. Refer to Question 7 above. Solve using the financial calculator, documenting your steps/keystrokes.
3. You agree to repay a loan over five years with the following stream of cash payments: $1,000; $1,100;
$1,250; $1,280; and $1,300. If you wish to discount these payments to their present value today using 4%,
why can you not use one annuity calculation, as seen in previous chapters?