Question

PART 2 - HOMEWORK 3 - Time Value of Money (30
pts) |
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Please use Excel to answer the following questions. Print an Excel spreadsheet that presents your answers to these TVM questions and also print the formula sheet that shows how you calculated your answers. | |||||||||

1 | Calculate the present value of 120 monthly payments of $300 at an annual | ||||||||

rate of 8%. The payments are made at the end of each month. | |||||||||

2 | You are financing a new car with a 3 year loan at 5% annual interest, compounded | ||||||||

monthly. The amount you are borrowing is $16,000. What are your monthly payments? | |||||||||

3 | What is the maximum you can borrow if you can only afford a monthly payment | ||||||||

of $200? The interest rate is 5%. The term is three years. | |||||||||

4 | If you deposit $5,000 in a savings account that pays 8% annual interest compounded | ||||||||

monthly, and make no other deposits to the account, how much will you have | |||||||||

after 5 years? | |||||||||

5 | In addition to the $5,000 as specified in the above problem, how much will you | ||||||||

have at the end of 5 years if you also deposit an additional $300 at the end of | |||||||||

each month for the entire 5 year period? | |||||||||

6 | In addition to the $5,000 as specified in above problem #4, how much will you | ||||||||

have at the end of 5 years if you also deposit an additional $300 at the beginning | |||||||||

of each month for the entire 5 year period? | |||||||||

7 | You will be making payments every quarter on a $100,000 loan. The interest rate | ||||||||

is 8%. How much are your payments if you plan on paying off the loan in 5 years? | |||||||||

8 | Calculate the future value of 120 monthly payments of $1,000 at an annual | ||||||||

rate of 12%. The payments are made at the beginning of each month. | |||||||||

9 | In five years we need $225,000. How much do we deposit today if the annual | ||||||||

interest rate is 5%, compounded annually? | |||||||||

10 | In five years we need $225,000. How much do we deposit today if the annual | ||||||||

interest rate is 5%, compounded daily? |

Answer #1

EXCEL FORMULA:

Note: Post the rest of the questions separately

I need the EXCEL formula for the following questions,
please.
What is the formula to calculate how much a savings account
would be worth if the initial balance is $1,000 with monthly
deposits of $75 for 10 years at 4.3% annual interest compounded
monthly? What is the formula result?
You want a savings account to grow from $1,000 to $5,000 within
two years. Assume the bank provides a 3.2% annual interest rate
compounded monthly. What is the formula to calculate...

You deposit $1000 at the end of each month in an account that
pays a 3% interest rate compounded monthly.
1. How much will be in the account after 10 years? 2. What was
your total contributions? 3. How much interest did you earn?
Please print clearly. thanks!

1a.)Calculate, to the nearest cent, the present value of an
investment that will be worth $1,000 at the stated interest rate
after the stated amount of time. HINT [See Quick Example 4.]
5 years, at 5.2% per year, compounded weekly (52 times per
year)
1b.) Find the effective annual interest rate r of the
given nominal annual interest rate. Round your answer to the
nearest 0.01%.
13% compounded monthly
1c.) Compute the specified quantity.
You take out a 5 month,...

Your student loan, taken out five years ago, wa in the amount of
$20,000 with the annual interest rate of 5% compounded monthly over
those five years. Because it is a student loan, you did not make
any payments until now. You just graduated and your payment starts
at the end of each month starting at the end of this month. If you
plan to pay back the loan in 5 years, how much is your monthly
payment?
$333.81
$484.37...

You deposit $300 each month into an account earning 2% annual
interest compounded monthly
A. How much money will you have in your account in 35 years?
B. How much total money will you put into the account ?
C. How much total interest will you earn?

TIME VALUE OF MONEY
Assume you put $5,000 into an investment fund today that will
pay 4% compounded annually for 10 years. What will the fund be
worth in 10 years? How much of this is interest?
2. It is the beginning of 20Y1 and it’s time to renew your
security alarm service! The alarm company offers two plans for
three years of coverage. Under the first plan, $1,000 annual
payments are due at the end of 20Y1, 20Y2, and...

Please show your steps for each part of the
problem, and if a calculator was used, list the
button combination pressed in order to arrive at
your answer!
a. Jack and Jill are twins and at 20 years of
age they both opened separate investment accounts with an on online
broker. Jack started investing $50 a month starting from today.
Jill will save $55 a month starting at the end of the month. if
this investment account gives them 8%...

please answer all questions!!!
1. A loan may be repaid using the following two options of
payments: i) Payments of 2,000 at the end of each year for eighteen
years ii) Payments of 2,500 at the end of each year for nine years.
Which of the following is closest to the effective annual interest
rate being paid on the loan?
A. 14% B. 17%. C. 20%. D.23%. E. 26%
2. A loan is being repaid by payments of 1100 at...

You would like to save annually for buying a car 6 years from
today. Suppose the first deposit is made today and the last deposit
will be made 5 years from now. Assume the car will cost you $30,000
and your deposits earn you interest at 6% p.a, compounded
annually.
(a) What is your annual deposit amount?
(b) Instead of making annual deposits, you would like to make
your deposit monthly and the bank is happy to pay your interest...

a. [3 pts] Consider the simple loan case. Suppose that
the dealership allows you to pay the car off in four installments
of $5,000, with each installment due once a year. The first payment
is due the day that you purchase the car; the remaining
installments are then paid on the same date each consecutive year,
for the remaining three years. What is the present discounted value
of the payments you make for the car?
b. [5 pts] Now suppose...

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