Question
1.With annual compounding at 8 percent for 47 years, what is the approximate future value of a $20,000 initial investment? 2. Assume that the interest
1.With annual compounding at 8 percent for 47 years, what is the approximate future value of a $20,000 initial investment?
2. Assume that the interest rate is greater than zero. Which of the following cash-inflow streams totaling $1,500 would you prefer? The cash flows are listed in order for Year 1, Year 2, and Year 3 respectively.
3. You are going to place $12,500 into a certificate of deposit (CD) at a 6% annual rate (compounded annually) with a maturity of 30 months. How much money will you receive when the CD matures?
4. You expect to deposit the following cash flows at the end of years 1 through 5, $1,000; $4,000; $9,000; $5,000; and $2,000 respectively. What is the future account value at the end of year 6 if you can earn 10% compounded annually?
5. A real estate investment will pay $15,000 at end of year 1 ; $ 25,000 end of year 2 and $50,000 end of year 3. Note that the discount rate is 5 percent. What is the investments present value?
6. Your father gets a good job and wants to deposit in his account $1200 at the end of each year for 3 years. He earns 2% interest paid daily. How much will be in his account after 3 years?
7. What is the Present value of USD 15,000 that you will receive end of year 3 if the interest rate is 8% compounded semi-annually?
8. Whats the future value of $7,500 after 10 years if the appropriate interest rate is 8%, compounded annually?
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