User Account

All Pages

Time value of money problems

Assignment Help Finance Basics
Reference no: EM131721690

1. Answer the following questions assuming the interest rate is 8 percent.

Time Value of Money Problems

a. What is the present value of $1,000 to be received in four years?

b. What is the present value of $1,000 in eight years? Why does the present value fall as the number of years increases?

c. What will the value in seven years of $12,000 invested today?

d. How much would you pay for the right to receive $5,000 at the end of year 1, $4,000 at the end of year 2, and $8,000 at the end of year 10?

e. How long will it take for a $2,000 investment to double in value?

f. What will be the value of 20 years of $500 invested at the end of each year for the next 20 years?

g. A couple wishes to save $250,000 over the next 18 years for their child's college education. What uniform annual amount must they deposit at the end of each year to accomplish their objective?

h. How long must a stream of $600 payments last to justify a purchase price of $7,500.00? Suppose the stream lasted only 5 years. How large would the salvage value (liquidating payment) need to be to justify the investment of $7,500.00?

Reference no: EM131721690

Questions Cloud

What is the volatility of investment : The past few quarters, the value has been $100k,$90k,$100k,$110k,$100k. What is the volatility of your investment?
How has the composition of deposits changed : How has the composition of deposits changed at your favorite local depository institution over the past 10 years? You can find this deposit information.
How you would negotiate the request with the instructor : You have decided that you don't want to take the final exam in this class. Explain how you would negotiate this request with the instructor.
Examine two potential risks that could adversely affect : Examine two (2) potential risks that could adversely affect operational effectiveness of U.S. multinational corporations that have plans.
Time value of money problems : a. What is the present value of $1,000 to be received in four years?
Determine activity rate for the order filling activity cost : The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:
Enumerate the tests you would perform on certain inputs : enumerate the tests you would perform on certain inputs, such as a person's name, credit card number
Define interest rates on checking accounts : Which depository institutions currently quote the highest interest rates on checking accounts? Savings accounts? Money market deposits?
You are considering your first debt issue : You are considering your first debt issue, which would change your capital structure to 30% debt and 70% equity. If your cost of debt is 7%.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the default risk premium on nikki g

The maturity risk premium is 0.40 percent on 2-year securities and increases by 0.07 percent for each additional year to maturity. Calculate the default risk premium on Nikki G's 10-year bonds. (Round your answer to 2 decimal places.)

  How much you need to save to meet your retirement goals

Go to money.msn.com/retirement/retirement-calculator.aspx. Complete the worksheets to determine how much you need to save to meet your retirement goals.

  Dividends are expected to grow at a 80 percent annual rate

stock in dragula industries has a beta of 1.2. the market risk premium is 6 percent and t-bills are currently yielding

  What is your initial reaction to your credit report

based on yournbsp sample credit report write a paper to address the following questions.what is your initial reaction

  What is the present value

What is the present value of $4,000 paid at the end of each of the next 87 years if the interest rate is 6% per year?

  Calculate the expected rates of return for the market and

the market and stock s have the following probability distributionsprobability rm rs0.3 15 200.4 9 50.3 18 12a

  How to account for the gain or loss on the sale of property

Describe how to account for the gain or loss on the sale of property, plant, or equipment. What expenditures should be capitalized when equipment is acquired?

  If the current market price is 780 what will be the

a bond has a par value of 1000 a time to maturity of 15 years and a coupon rate of 7.80 with interest paid annually.

  Is a foreclosure sale sometimes desirable

Is a foreclosure sale sometimes desirable or even necessary when the mortgagor is willing to give a voluntary deed?

  If all the current assets were liquidated today the company

klingon widgets inc. purchased new cloaking machinery three years ago for 4 million. the machinery can be sold to the

  What should the stock price be today

Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. a. If the last dividend paid was $2, what will the next dividend be? b. If the discount rate ..

  What is the effective yield to maturity

What is the effective yield to maturity? (Assume annual compounding. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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