Question
1) Qiang places the amount of $ 66 in a special bank account that guarantees to provide $ 166 in 14 years. What rate of
1) Qiang places the amount of $66 in a special bank account that guarantees to provide $166 in 14 years. What rate of return would Qiang earn on this opportunity?
2) Hansi is promised to receive $80 in 6 years. Hansi, being profligate, prefers to spend this promised amount of money today. What is the equivalent present value of the settlement if the interest rate is 3.50%?
3) Jordon places the amount of $525 in a bank savings account today that offers an annual interest rate of 8% compounded 12 times per year. How much will Jordon have in his account 9 years from today?
4) Jackson just received a settlement in a lawsuit that promises two future payments of $330, the first payment at the end of the 7th year, and the second at the end of the 12 year. Jackson, being profligate, doesn't want to wait and instead wants instead to spend all of the settlement money today. What is the present value of his settlement assuming the interest rate of 5%?
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