Calculate the correct value of the variable identified

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Reference no: EM131831286

1. Develop the timeline (linear representation of the timing of cash flows)

2. Identify the time value of money variable (PV, FV, PMT, N or Rate) which needs to be calculated in the question.

3. Identify the values of the remaining four variables (PV, FV, PMT, N or Rate) from the question. Be sure to input positive or negative signs.

4. Calculate the correct value of the variable identified in step (2).

1. Your company has received a $50,000 loan from an industrial finance company. The annual payments are $6,202.70. If the company is paying 9 percent interest per year, how many loan payments must the company make (round to nearest $1)?

2. You are ready to retire. A glance at your 401(k) statement indicates that you have $750,000. If the funds remain in an account earning 9.0%, how much could you withdraw at the beginning of each year for the next 25 years (round to nearest $1)?

3. If you wish to accumulate $200,000 in the child's college fund after 18 years, and can invest at a 7.5% annual rate, how much must you invest at the end of each year if the first deposit is made at the end of the first year (round to nearest $1)?

Reference no: EM131831286

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