Reference no: EM131797912
Question: a) Calculate the present value of a single payment of $100,000 that will receive in 10 years from now (at the end of tenth year), assuming the discount rate of 5%.
b) How much money will you have in 20 years from now, if you deposit $20,000 at the present time in a bank account that gives you 4% interest compounded annually?
c) Assume you are going to save $12,000 every year for the next 25 years. Each year at the end of the year you will deposit the $12,000 (starting from year 1) in the back account that gives you 4% interest compounded annually. How much money will you have at the end of the 25th year?
d) Assume you are planning to have $1,000,000 in 30 years from now. How much do you need to save and deposit at the end of every year in that bank account, which gives you 4% of interest, compounded annually?
e) Calculate the accumulated present value of 10 uniform payments of $15,000 that you will receive in the end of each year from year 1 to year 10. Consider the interest rate of 6% per year compound annually.
f) Calculate the annual uniform series of payments, paid in the next 20 years (from year 1 to year 20), that are equivalent to $100,000 of investment at the present time, considering the interest rate of 6% per year compound annually. You can think of this question as: taking a loan of $100,000 at 6% interest and paying it off in 20 years.
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