Global Finance

ECTED VIEW Be careful-files from the Internet can contain vinuses. Unless you need to edit it's safer to sta Time Value of Money Please show all calculations. If you are using the financial calcalator please show your data imputs. Please submit your homework to the instructor at the beginning of class 1. You just received a bonus of $4000 a. Calculate the future value of $4000 given that it will be held in the bank for five years and eam an annual interest rate of 5 percent b. Recalculate part (a) using a compounding period that is (1) semiannual and (2) weeky c. Recalculate parts (a) and (b) using a 10 percent annual interest rate d. Recalculate part (a) using a time horizon of 10 years at a 5 percent interest rate e. What conclusions can you draw when you compare answers in parts (c) and (d) with the answers in parts (a) and (b)? 2. You are offered $100,000 today or $300,000 in 13 years Assuming you 3. Sara would like to make a single investment and have $1 milion at the time 4. A new finance book sold 10,000 copies following the first year of its release 5. A lottery claims its grand prize is $10 million, payable over 20 years at can make 11 percent on your money, which should you choose? of her retirement in 20 years. She has found a mutual fund that wil eam 4 percent annually. How much will Sara have to invest today? and the sales are expected to increase by 20 percent per year. What sales are expected in years 2, 3 and 4? Graph this sales trend and explain $500,000 per year. If the first payment is made immediately (hint annuity due), what is this grand prize really worth? Use adscont rate of 6%