Question
Hello, If you could check my work to see if all the following answers are correct, that would be greatly appreciated. If one of them
Hello,
If you could check my work to see if all the following answers are correct, that would be greatly appreciated. If one of them is not correct, please provide a detailed solution so I may be able to solve similar problems in the future. Thank you very much in advance. IMPORTANT: Please, when you are providing your explanations, use formula's only. Please do not use excel. I must show all my work on exams and we aren't allowed calculators. Thank you in advance for your understanding.
Also, can you explain number 5 and number 8 b in detail, please. I am 100 percent sure those two answers are correct. However, I would like to know why the exponent is one less than the year provided in the question.
1. You currently have $100,000 saved and the aniual interest rate is 8%. You plan to make a down payment on a home in 10 years. Assume that you do not make any additional contributions to your savings. How large of a down payment will you be able to afford? 2. McDonald's Filet-o-Fish sandwich has increased in price by 5.45% annually since 1965 As of 2017, it costs $3.79. If this is true, what was the price of a Filet-o-Fish sandwich in 1965? 3. You're saving money to buy a new $276,000 Ferrari. (Assume the car price will not increase.) You have S95,000 today that can be invested at your bank. The bank pays 2.4% annual interest on its accounts. How long will it be before you have enough money to buy the car? 1. A friend is willing to lend $2,000 to you. She demands repayment of $3,500 in three years. What annual interest rate is she charging you? 5. Let's say that social security promises you $39,000 per year starting when you retire 45 years from today (the first $39,000 will come 45 years from now). If your discount rate is 8%, compounded annually, and you plan to live for 15 years after retiring (so that you will get a total of 16 payments including the first one), what is the value today of social security's promise? 6. You won a lottery and are offered to receive $50,000 today or $100,000 in 10 years. If the interest rate is 12% per year, which option is preferable? 7. Your uncle developed a new video game franchise and left the rights to you. Under current copyright law, your intellectual property is protected for 95 years. You expect that the profits from the franchise will be $1 million in its first year and that this amount will grow at a rate of 5% per year during the life of the copyright. Assume each year's profits are received at the end of the period. Further assume that once the copyright expires, imitations and knockoffs will drive the profits from the intellectual
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