How much do you need to invest

Assignment Help Finance Basics
Reference no: EM1344774

Think of something you want or need for which you currently do not have the funds. It could be a vehicle, boat, horse, jewelry, property, vacation, college fund, retirement money, etc. Select something which costs somewhere between $2,000 and $50,000. Use the "Present Value Formula", which computes how much money you need to start with now to achieve the desired monetary goal. Assume you will find an investment that promises somewhere between 5% and 10% interest on your money (you choose the rate) and pretend you want to purchase your desired item in 12 years. (Remember that the higher the return, usually the riskier the investment, so think carefully before deciding on the interest rate.) How much do you need to invest today to reach that desired amount 12 years from now?

Reference no: EM1344774

Questions Cloud

Determine the business risk and the financial risk : Suppose that a firm has following Income Statement. Use this information to estimate the business risk and the financial risk as measured by the degree of operating leverage.
How far to the right of support is the planks center gravity : A 54 N crate is suspended from the left end of a plank. The plank weighs 21N, but it is not uniform, so its center of gravity does not lie halfway between the two ends. The system is balanced by a support that is 0.3m from the left end of the plan..
What is the maximum reaction time : A plastic ball in a liquid is acted upon by its weight and by a buoyant force. The weight of the ball is 4.8N. The buoyant force has a magnitude of 6.5N and acts vertically upward. External force acting on the ball maintains it in the state of res..
Criteria selecting a life-cycle model for the project : What criteria would you use in selecting a life-cycle model for the project?
How much do you need to invest : How much do you need to invest today to reach that desired amount 12 years from now - Think of something you want or need for which you currently do not have the funds.
Ebit and optimal level of leverage : Describe EBIT and discuss why optimal level of leverage from a tax-saving perspective is the level at which interest equals EBIT.
How fast was she moving at the start of her coast : An electric dipole is formed from +/-4.0 nC point charges spaced 3mm apart. The dipole is cantered at the origin, oriented along the y-axis. What is an electric field strength at point (x,y) = ( 6.0 cm, 0 cm)
Explain what is the value of the firm : Explain what is the value of the firm and explain what will the value be if Corrado converts to 50% debt?
What is the theoretical greatest amount of ice freezer : Assume the freezer operates for 5 hours each day, how much power does it require while operating

Reviews

Write a Review

Finance Basics Questions & Answers

  Description of present value of lump sum

What is the future value of lump sum at the end of year 5? What is the future value of mixed stream at the end of year 5? Based upon your findings in parts (a) and (b), which alternative should Gina take?

  Calculating tcm free cash flows

TCM Petroleum is an integrated oil company headquartered in Fort Worth, Texas. The following are the information on its income statements for 2007 and 2008 (all dollar figures are in millions): Calculate TCM's free cash flows (FCF) for 2007 and..

  Calculation of fair rate of return by using capm

Compute a fair rate of return for Intel common stock, which has 1.2 beta. The risk-free rate is 6 percent, and the market portfolio (New York Stock Exchange stocks) has expected return of 16 percent.

  Describing the present value

A firm with a cost of capital of 13.5% has a contract to sell an asset for $230,000 in five years. The asset costs $111,000 to produce today (at t = 0). Find out the maximum annual carrying cost that the firm can bear and still make this an advisab..

  Find dollar amount of the maintenance margin

An American firm sells yen futures contracts to cover possible exchange losses on its export orders denominated in Japanese yen. Amount of the initial margin is $20,000.

  Relevant governance or ethical issues

Describe any relevant governance or ethical issues the M&A activity faced during its formative term? Discuss specifics and how the issue was handled.

  Unbiased expectations hypothesis

The Wall Street Journal reports that the rate on two year Treasury securities is 2.10% and the rate on four year Treasury securities is 3.05%.

  Calculate the stock value

Last year Productions pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $0.40 a share for two years commencing four years from today.

  Computation of expected value and standard deviation

Computation of expected value and standard deviation and What is the expected value of unit sales for the new product

  Calculation of equated annual cost

Calculation of Equated Annual Cost and You are evaluating two different silicon wafer milling machines

  Determining the cost of equity

What is the value of the firm according to MM with corporate taxes? What is the firm's cost of equity? The firm's gain from leverage according to the Miller model is $126,667. If the effective personal tax rate on stock income is 20 percent, what i..

  Calculation of net present value of decision making

Calculation of Net Present Value of decision making and the mining engineers estimate a 60% chance of success and the financial staff has calculated

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd