Which of the following is true about perpetuities?

Samantha enters a rent-to-own agreement for living room furniture. She will pay $60 per month for one year. Which of the following shows the timeline for her payments if the first payment is one month from now?

If money is invested at 8% per year, after approximately how many years will the interest earned be equal to the original investment?

An investment pays you $20 000 at the end of this year, and $10 000 at the end of each of the four following years. What is the present value (PV) of this investment, given that the interest rate is 4% per year?

A perpetuity will pay $2 500 per year, starting five years after the perpetuity is purchased. What is the future value (FV) of this perpetuity, given that the interest rate is 5%?

A perpetuity has a PV of $32 000. If the interest rate is 10%, how much will the perpetuity pay every year?

You are scheduled to receive $10 000 in one year. An increase in the interest rate will have what effect on the future value of this cash flow?

Suppose you invest $5000 in an account paying 5% interest per year for 15 years.

How much of the future value balance corresponds to ‘interest on interest’?

Please round to 2 decimal places and DO NOT include $.

Owen expects to receive $20 000 at the end of next year from a trust fund. If a bank loans money at an interest rate of 7.5%, how much money can he borrow from the bank today on the basis of this information?

Your best friend, Simon has offered you an investment opportunity that requires an initial investment of $7000 today and will grow to $8500 in one year. If interest rates in the bank average 10%, what is the premium Simon is offering ( in % terms) with his investment opportunity?

Please round to 2 decimal places .