Question
Im stuck with these questions, please help 1.) You want to start saving for retirement. If you deposit $2,000 at the end of each year
Im stuck with these questions, please help
1.) You want to start saving for retirement. If you deposit $2,000 at the end of each year for the next 60 years and earn an 11% annual rate of return on the investment, how much will you have when you retire if the above payments are made at the beginning of each year?
-$9,510,132
-$1,048,114
-$10,556,246
-$792,000
2.) To calculate the present value of an annuity due you would take the present value of an ordinary annuity answer and _____ and to calculate the future value of an annuity due you would take the future value of an ordinary annuity answer and _____.
-multiply by (1+k); divide by (1+k)
-multiply by k; divide by k
-multiply by (1+k); multiply by (1+k)
-divide by (1+k); multiply by (1+k)
3.)The present value interest factor for a single dollar amount is:
-discount rate used in present value cash flow calculations
-1/(1 + k)n
-1/(1 + k)n times the future value
-(1 + k)n
4.) The future value interest factor for a single dollar amount is:
-1/(1 + k)n
-discount rate used in future value cash flow calculations
-(1 + k)n times the present value
-(1 + k)n
5.)If you (1) decrease your required return and (2) decrease the number of periods, what effect would this have on your calculation of the present value of a given dollar amount?
(1)increase; (2)decrease
(1)decrease; (2)increase
(1)decrease; (2)decrease
(1)increase; (2)increase
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started