Question
1. What is the present value of an investment which pays a lump sum of $50,000 in 12 years to an investor who requires a
1. What is the present value of an investment which pays a lump sum of $50,000 in 12 years to an investor who requires a 6% annual rate of return? Enter your answer as a positive number. Round to the nearest cent.
2. If you were able to purchase the investment the investment in the previous question (pays a $50,000 lump sum in 12 years) for $20,000 today, would annual rate of return would you earn? FORMATTING: Enter "9.87" for 9.87%. Round your answer to two decimal places.
3. You opened an account with a $12,000 deposit 20 years ago. You have made no other deposits or withdrawals. If the account has earned an 11% annual rate of return, what is the account's balance today? Enter your answer as a positive number. Round to the nearest cent
4. You open an account today with a single deposit of $10,000. You plan to make no other deposits or withdrawals. If the account earns an annual rate of return of 10%, how many years will it take for the account balance to grow to $1 million? Enter your answer as a positive number. Round to two decimal places.
5. You want to accumulate an account balance of $100,000 in 20 years by making a single deposit today. If you can earn a 7.5% annual rate of return and plan to make no other deposits or withdrawals, how large does your deposit need to be? Enter your answer as a positive number. Round to the nearest cent.
Step by Step Solution
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Lets calculate each of these financial questions step by step 1 Present Value of 50000 in 12 Years Well use the present value formula PV FV 1 rn Where ...Get Instant Access to Expert-Tailored Solutions
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