Time value of money problems
Course:- Microeconomics
Reference No.:- EM13700113

Assignment Help
Assignment Help >> Microeconomics

Calculate the following time value of money problems.

a. What is the future value of 24 periodic payments of $4,620 each made at the beginning of each period and compounded at 8%?

b. What would you pay for a $194,000 face value bond that matures in 15 years and pays $19,400 a year in interest if you wanted to earn a yield of 9%.

c. Mike Finley wishes to become a millionaire. His money market fund has a balance of $317,283 and has a guaranteed interest rate of 11%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000?

d. Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund for 8 years (his planned retirement date). If Bogut plans to establish the AB Foundation once the fund grows to $1,850,930, what annually compounded interest rate must he earn to achieve his goal?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
Does the equal marginal principle apply to personal decisions when you have limited income and time? How do you allocate a limited amount of study time when faced with three e
Is it more important to know specific languages or to have an aptitude for picking up languages and software packages quickly? How important is it that the person being hired
Some years ago, conservation groups paid cattlemen in the Western United States to move their herds away from wild buffalo herds so that the buffalo would have more feed and w
The information technology field is very competitive, and a large information technology company has employed the bank for guidance. companies may have to compete for high qua
Do you agree or disagree with the statement that: "A monopolist always charges the highest possible price."? Explain. b.) Why can't an individual firm raise its price by r
The county municipal council owns a toll bridge that costs the county $250,000 every year to operate and $130,000 a year to maintain. The facility brings in revenue of $500,00
Assets can be classified in 3 ways according to its liquidity. But, such assets do not include homes, jewellery, vehicles, etc. Why? (Use three sentences maximum). People ofte
Prepare the report evaluating the alternatives and a recommended course of action. Use ratio analysis to support your evaluations and recommendation - projected cash shortfa