Question
Chapter 5 - Hello I need help with the following Business Finance Questions. Q1.) Your wealthy uncle established a bank account with $1,500 for you
Chapter 5 - Hello I need help with the following Business Finance Questions.
Q1.) Your wealthy uncle established a bank account with $1,500 for you when you were born. For the first 9 years of your life, the interest rate earned on the account was 4%. Since then, rates have been only 2%. Now you are 23 years old and ready to cash in. How much is in your account?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Amount________________?
Q2.) A factory costs $510,000. You forecast that it will produce cash inflows of $155,000 in year 1, $215,000 in year 2, and $370,000 in year 3. The discount rate is 11%.
a.What is the value of the factory?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Value of the Factory____________?
Q3.) a.If you borrow $2,700 and agree to repay the loan in four equal annual payments at an interest rate of 10%, what will your payment be?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Amount of Payment___________
b.What will your payment be if you make the first payment on the loan immediately instead of at the end of the first year?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Amount of Payment____________
Q4.) You believe you will need to have saved $560,000 by the time you retire in 40 years in order to live comfortably. If the interest rate is 6% per year, how much must you save each year to meet your retirement goal?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Annual Savings________________
Q5.) What is the present value of the following cash-flow stream if the interest rate is 5%?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
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