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




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