Question
1. In order to calculate the amount of money needed to maintain a standard of living 20 years from now, you attempt to calculate an
1. | In order to calculate the amount of money needed to maintain a standard of living 20 years from now, you attempt to calculate an FV (20 years from now) of today's living expenses. What would be most appropriate for you to use as the interest rate? | ||||||||
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2. | Assume you will invest $500 per month in an investment earning 11% per year (assume monthly compounding). After 10 years, you stop making the monthly payment. The money you have accumulated after 10 years remains invested and continues to earn 11% (compounded annually) for an additional 20 years (with no further payments made). How much do you have at the end of the total 30 year period? | ||||||||
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3. | You invested $5,000 in an original Salvador Dali 'melted clocks' painting 30 years ago. The painting has increased in value at a rate of 9.5% per year. How much is it worth now? | ||||||||
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4. | Assume a home mortgage of $150,000, with an interest rate of 5.5% for 30 years (monthly payments). If you pay an extra $200 per month towards the principle of the loan, how many months will it be until you pay off the loan? | ||||||||
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5. | Your company's receivables turnover ratio increases from 12 to 18. Which of the following is most likely to be true? | ||||||||
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