Question

What is the present value of $200 to be received two years from now, with an...

What is the present value of $200 to be received two years from now, with an interest rate of 5%?

You deposit $2000 today at 6% interest. How much will you have in 5 years?

You invest $5,000 today. You will earn 8% interest. How much will you have in 4 years?

You have $450,000 to invest. If you think you can earn 7%, how much could you accumulate in 10 years?

You deposit $300 each year for 15 years at 6%. How much will you have at the end of that time?

You invest $2,000 in IRA’s each year for 5 years. If interest on these IRA’s is 4%, how much will you have at the end of those 5 years?

   

If you deposit $4,500 each year into an account paying 8% interest, how much will you have at the end of 3 years?

  

How much would you have to deposit now to have $15,000 in 8 years if interest is 7%?

If you want to have $10,000 in 3 years and you can earn 8%, how much would you have to deposit today?

  

If you think you can sell an asset for $25,000 in five years and you think the appropriate discount rate is 5%, how much would you be willing to pay for the asset today?

Find the present value of a 4-year, $3,000 per year annuity at 6%.  

You borrow $50,000 and will make monthly payments for 2 years at 12% interest. How much will those payments be?  

You just won a contest that will pay you $15,000 each year, for five years. Assuming a 12% discount rate, what is the present value of your contest winnings?

14. John plans to retire in 12 years. When he retires, he would like to take an extended vacation, which he expects will cost at least $40,000. What lump-sum amount must he invest now to have the needed $40,000 at the end of 12 years if he invests at

8%?

12%?

15. If John chooses to invest money each year to fund his vacation in 12 years, how much money must he invest at the end of each year to have $40,000 to fund his vacation if he invests at

8%?

12%?

16. You have just received an inheritance from a relative. You can invest the money and either receive a $200,000 lump-sum amount at the end of 10 years or receive $14,000 at the end of each year for the next 10 years. If your minimum desired rate of return is 12%, which alternative would you prefer?

Homework Answers

Answer #1
1) Present Value $ 181.41
Working:
Present Value = 200*(1+0.05)^-2
= $           181.41
2) Future Value of Investment $       2,676.45
Working:
Future Value = 2000*(1+0.06)^5
= $       2,676.45
3) Future Value of Investment $       6,802.44
Working:
Future Value = 5000*(1+0.08)^4
= $       6,802.44
4) Future Value of Investment $ 8,85,218.11
Working:
Future Value = 450000*(1+0.07)^10
= $ 8,85,218.11
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
3-part question. Five years from now you would like to have $25,000 for a down payment...
3-part question. Five years from now you would like to have $25,000 for a down payment on a home. Assuming you could earn 9% interest, how much money would you need to invest today as a lump sum to meet your goal? How much money would you have to invest at the end of each year to meet your goal? How much would you need if you invested the payments at the beginning of each year with the first payment...
What is the present value of $10,000 to be received in 6 years? Your required rate...
What is the present value of $10,000 to be received in 6 years? Your required rate of return is 8% per year. If you invest $1,000 a year for 20 years at 7% annual interest, how much will you have at the end of the 20th year? If you buy a 5 year, 3% CD for $2,000. How much is it worth at maturity? How much would you be willing to pay today for an investment that pays $900 per...
You would like to have ​$73,000 in 14 years. To accumulate this​ amount, you plan to...
You would like to have ​$73,000 in 14 years. To accumulate this​ amount, you plan to deposit an equal sum in the bank each year that will earn 9 percent interest compounded annually. Your first payment will be made at the end of the year. a.  How much must you deposit annually to accumulate this​ amount? b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should the​ lump-sum deposit​ be? ​...
You would like to have $47,000in 9 years. To accumulate this amount you plan to deposit...
You would like to have $47,000in 9 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 8 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate $47,000 in 9 years? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be?...
What is the present value of $10,000 to be received 10 years from today, assuming a...
What is the present value of $10,000 to be received 10 years from today, assuming a 6 percent annual interest (discount) rate?   2. If you deposit $3,000 in a bank account that pays 4 percent annual interest, what would your account balance equal after 9 years?   3. To settle a wrongful death case, a judge ordered the maker of a defective product to pay the spouse of the deceased person $100,000 today, $150,000 four years from today, and $250,000 eight...
1. You would like to have $50,000 in 15 years. To accumulate this amount you plan...
1. You would like to have $50,000 in 15 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 7% interest annually. Your first payment will be made at the end of the year. o How much must you deposit annually to accumulate this amount? o If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? o At...
Ahmad Abu Al-Hawa plans to retire 40 years from now. He expects that he will live...
Ahmad Abu Al-Hawa plans to retire 40 years from now. He expects that he will live 30 years after his retirement. He wants to have enough money upon reaching retirement age to be able to withdraw $180,000 from his account at the end of each year he expects to live. Ahmad plans to accumulate the retirement fund by making an equal deposit at the of each year for the next 40 years. The interest rate is expected to be 12%...
Question 20 What is the present value of $27 received at the end of each year...
Question 20 What is the present value of $27 received at the end of each year for 5 years?Assume a discount rate of 9%. The first payment will be received one year from today I. $42 II. $114 III. $88 IV. $105 V. None of the options specified here Question 16 Winner Lei is thinking of buying a miniature golf course. It is expected to generate cash flows of $40,000 per year in years 1, $50,000 per year in year...
If you deposit $1000 in one year, $2000 in two years and $3000 in three years,...
If you deposit $1000 in one year, $2000 in two years and $3000 in three years, $4000 in four years, $5000 in five years. How much will you have in five years at 9 percent interest? How much in 10 years if you add nothing to the account after the fifth year? a) Suppose you invest $2500 in a mutual fund today and $5000 in one year. If the fund pays 9% annually, how much will you have in two...
Alma wants to have $20,000 in her investment account ten years from now. Currently, she has...
Alma wants to have $20,000 in her investment account ten years from now. Currently, she has nothing saved. How much would she have to deposit today to reach her goal if this is the only amount she invests? She expects to earn 8.5 percent, compounded annually. How much must she deposit today?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT