Problem Assignment: Time Value of Money | ||||||||||||||
1 | If you deposit $15,000 today and earn 8% annual interest, how much will you have in 9 years? | |||||||||||||
2 | Tiffany will receive a graduation gift of $10,000 from her parents in 3 years. If the discount rate | |||||||||||||
is 7%, what is this gift worth today? | ||||||||||||||
3 | What is the present value of a 20-year ordinary annuity of $30,000 using a 6% discount rate? | |||||||||||||
4 | You deposit $5,000 in an account that pays 8% interest per annum. How long will it take to double your money? | |||||||||||||
5 | The Johnsons have $60,000 to use as a down-payment on a house, and they want to borrow $240,000 | |||||||||||||
from the bank. The current mortgage interest rate is 5%. If they make equal monthly payments for 30 years, | ||||||||||||||
how much will the monthly payment be? | ||||||||||||||
6 | Tim paid $250 per month into his 401K retirement plan. After 30 years, he had accumulated $500,000. What | |||||||||||||
average annual rate of interest had he earned over the 30 years? | ||||||||||||||
7 | Charlotte's firm had sales of $525,000 in the year 2001. By 2012, sales had increased to $1,200,000. What was | |||||||||||||
the average annual rate of increase? | ||||||||||||||
8 | Alan had saved up $252,000. How much more must he save each year over the next 20 years in order to have a | |||||||||||||
total of $1 million? Alan earns 5% interest, compounded annually. | Assume that the amount to be saved and invested each year is at the END of the year. | |||||||||||||
Remember to show all investments as negative numbers and the amound to be reaped as positive. | ||||||||||||||
PV | Rate | NPER | PMT | FV | ||||||||||
You are given a choice of taking the simple interest on 100,000 invested for 2 years
You are given a choice of taking the simple interest on 100,000 invested for 2 years at a rate of 3% Or the interest on 100,000 invested for 2 years at an interest rate of 3% compounded quarterly.Which investment earns the greater amount ofinterest? Give the difference between the amounts of interest earned by the two investments.The investment with -----------interest earns $________more interest ((Round to the nearest Cent as needed) Karen Gaines invested $10,000 in a money market account with an interest rate of 1.75% compounded semiannually. Six yearslater, Karen withdrew the full amount to put toward the down payment on a new house. How much did Karen withdraw from the account? Karen withdrew $ . (Round to the nearest cent as needed.) Click here to download the Solution
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