Question
For these first few, assume interest rate is 4%, and 'today' is 1 January, 2015: 1.You want $500 on Dec 31, 2015, then $600 Dec
For these first few, assume interest rate is 4%, and 'today' is 1 January, 2015:
1.You want $500 on Dec 31, 2015, then $600 Dec 2016, then $300 Dec 2017. How much should you deposit today?
2.In Dec 2019, you want $400, then Dec 2020 $700, then Dec 2021 $200. How much should you deposit 1 Jan, 2019?
3.Starting Dec 2018, you want $300/year for 4 years.How much should you deposit on 1 Jan, 2018?
4.In Dec 2019, you deposit $400, then 700 in Dec 2020, and $200 in 2021. How much will you have at end of 2021?
5.If you already had the answer to (2), is there an easier way to answer (4)?
Now; drop the 4% assumption.
6.If you can deposit $250 in Dec 2018, and want $300 in Dec 2021, what interest rate must you get?
7.If you invest $250 in Dec 2018 and receive $400 in Dec 2021, what is your return on investment?
8.If you invest $250 today (1 Jan 2015), and receive $400 in Dec 2017, what is your return on investment?
9.If you deposit $400 today in an account that pays 5% annual interest, how long will it be before you can have $700?
Now let's assume interest rate of 6%:
10.From Dec 2015 you want $200/yr until Dec 2020, then Dec 2020 also $3000. How much should you deposit today?
11.From Dec 2017 you want $200/yr until Dec 2022, then Dec 2022 also $3000. How much should you deposit 1 Jan 2017?
12.From Dec 2017 you want $200/yr until Dec 2022, then Dec 2022 also $3000. How much should you deposit today?
13.If from Dec 2015, you want $200 per year, forever, how much must you deposit today?
14.If Dec 2015 you want $200, $210 in 2016, $220.5 in 2017, and $231.53 in 2018, how much must deposit today?
15.In (13), that was a 5% increase each year. If that continued forever, how much must you deposit today?
16.If the CFs in (14) begin in Dec 2018, how much must you deposit Jan 1, 2018?
17.If the CFs in (14) begin in Dec 2018, how much must you deposit today?
18.If the CFs in (14) begin in Dec 2014, how much must you deposit today? (note; this is a bit tricky, depending on how you interpret the Dec 2014 cash flow).
19.If the CFs in (14) begin in Dec 2018, and in addition you have $240 in Dec 2015, 2016 and 2017 how much must you deposit today?
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