Project #886 - Present value annuity discount

14. The total cost of college is $100,000 per 18 years from today. If your discount rate is 8% compounded annually, what is the present value today of 4 years of college costs starting at 18 years from today?
 
 
21. You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug’s profits will be $2 million in the first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero.
 
What is the present value of the new drug if the interest rate is 10% per year
 

Subject Mathematics
Due By (Pacific Time) 09/29/2012 11:30 pm
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