Question

a) At the end of five years you wish to purchase a car for $25,000. You can invest your money at the rate of 5% compounded annually. How much money must you deposit in your investment account today in order to have enough funds to purchase your car? Interest rate - Actual amount of the deposit is: Number of periods - Table used - Factor from table used -

b) You want to buy a business with an annual cash flow of $28,000 for ten years. If you can invest at 5% what would be the maximum purchase price you would be willing to pay today? Interest rate - Purchase price of business: Number of periods - Table used Factor from table used -

c) You can afford to make five annual payments of $2,400 to purchase a new motorcycle. At an annual interest rate of 6% compounded annually, how much money would you need to deposit today make your purchase? Interest rate - Actual amount of the deposit is: Number of periods - Table used - Factor from table used -

d) You would like to purchase your first home in 10 years at a cost of $100,000. You currently have a savings account accumulating interest at the rate of 5.5% compounded annually with a balance of $20,000. How much additional money will you have to deposit today to accumulate the purchase price in ten years? Interest rate - Additional deposit to savings account: Number of periods - Table used - Factor from table used -

Answer 1