I need to pay $4000 a year for 6 years starting 7 years from now.  How much do I need to deposit in a bank one year from today to meet this obligation. Bank interest rate is 5%.


 

I borrowed $100,000 at 9%.  I make monthly payments of $900 (the first payment will occur in one month).  

After how many years will my loan be paid off?  


 

I can earn 5% on my deposits.  How long will it take for me to double my money?

 

 

 Suppose that I paid $500 for a bottle of rare wine.  I hope to sell this bottle for $600 two years later.  What is my rate of return on this investment?  

If the appropriate opportunity cost of capital for this wine is 12%, what is the present value of my expected sale price?

 

 

I need to save every year starting in year 1 and ending in year 5 to save $50,000 as a down payment on a house that I will buy in year 6.  

How much do I need to save in years 1 to 5 if bank pays 3%. 

 

 

You wish to set up a trust for the education of your child (four years undergraduate education plus three years of law school or a total of 7 years). The trust will pay its beneficiary $100,000 a year starting from Year 6 until Year 12. 

You anticipate the interest rate will be 5%.If you set aside a lump sum at Year 0 for the trust, how much should it be?