1. Sky invests $120,000 today and receives a future value 14 years from now of $500,000. Interest is compounded twice per year. Her stated annual interest rate is _____ for this twice-a-year compounded investment.
a. 10.3%
b. 10.6%
c. 10.4%
d. 10.5%
e. 10.7%
2. Brodie receives $900 every 12 months forever, starting 19 months from today. If his stated annual interest rate is 17% compounded monthly, what is the present value of this perpetuity?
a. $4,800
b. $4,400
c. $4,500
d. $4,700
e. $4,900