More info 1 1. Jeff just hit the jackpot in Las Vegas and won $65,000! If he invests it now, at a 14% interest rate, how much will it be worth in 20 years? 2. Bob would like to have $2,000,000 saved by the time he retires in 30 years. How much does he need to invest now at a 10% interest rate to fund his retirement goal? 3. Assume that Tina accumulates savings of $1 million by the time she retires. If she invests this savings at 10%, how much money will she be able to withdraw at the end of each year for twenty years? 4. Ivana plans to invest $2,500 at the end of each year for the next eight years. Assuming a 14% interest rate, what will her investment be worth eight years from now? 5. Assuming a 12% interest rate, how much would Terri have to invest now to be able to withdraw $14,000 at the end of every year for the next nine years? 6. Ray is considering a capital investment that costs $520,000 and will provide the following net cash inflows: Year Year 1 ... Year 2... Year 3 ... Net Cash Inflow $302,000 $198,000 $96,000 Using a hurdle rate of 8%, find the NPV of the investment. 7. What is the IRR of the capital investment described in Question 6? Reference Present Value of $1 Periods 1% 2% 3% 4% 5% Period 1 0.990 0.980 0.971 0.962 0.952 Period 2 0.980 0.961 0.943 0.925 0.907 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.794 6% 8% 10% 12% 14% 16% 18% 20% 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.890 0.857 0.826 0.797 0.751 0.712 0.769 0.743 0.718 0.694 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.675 0.636 0.592 0.552 0.516 0.482 0.641 0.609 0.579 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.404 0.361 0.400 0.351 0.305 0.266 0.233 0.354 0.314 0.279 0.308 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 Period 11 0.896 0.804 0.722 0.650 0.585 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.397 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.527 0.429 0.350 0.319 0.368 0.290 0.287 0.257 0.208 0.168 0.137 0.112 0.229 0.237 0.195 0.162 0.135 0.182 0.145 0.116 0.093 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.160 0.125 0.099 0.078 0.183 0.140 0.108 0.084 0.065 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0,146 0.092 0.059 0.038 0.024 0.016 0.010. Period 30 0.742 0.552 0.412 0.308 0.231 0.174 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.099 0.057 0.046 0.022 0.033 0.011 0.020 0.012 0.007 0.004 0.005 0.003 0.001 0.001 Reference - X Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 16% 18% 20% 0.847 0.833 1.647 1.605 1.566 1.528 2.246 2.174 2.106 2.798 2.690 2.589 8.111 Period 5 4.853 Period 6 5.795 5.601 5.417 5.242 Period 7 6.728 6.472 6.230 6.002 Period 8 7.652 7.325 7.020 6.733 Period 9 8.566 8.162 7.786 7.435 Period 10 9.471 8.983 8.530 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 Period 30 25.808 22.396 19.600 17 292 15.372 13.765 11.258 9.427 8.055 7.003 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.105 5.660 5.842 6.002 5.468 5.008 6.142 5.575 3.433 5.076 4.917 4.623 4.355 4.111 3.889 5.786 5.582 5.206 4.868 4.564 4.288 4.039 6.463 6.210 5.747 5.335 4.968 -4.639 7.108 6.802 6.247 5.759 5.328 4.946 7.722 7.360 6.710 6.145 5.650 5.216 3.274 3.127 2.991 3.685 3.498 3.326 3.812 3.605 4.344 4.078 3.837 4.607 4.303 4.031 4.833 4.494 4.192 5.029 4.656 4.327 5.197 4.793 4.439 5.342 4.910 4.533 4.611 5.092 4.675 6.623 5.929 5.353 4.870 6.873 6.097 5.467 4.948 6.177 5.517 4.979 6.233 5.548 4.997 Reference Future Value of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% Period 1 1.010 1.020 1.030 1.040 1.050 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1.200 Period 2 1.020 1.040 1.061 1.082 1.103 1.124 1.166 1.210 1.254 1.300 1.346 1.392 1.440 Period 3 1,030 1.061 1.093 1.125 1.158 1.191 1.260 Period 4 1.041 1.082 1.126 1.170 1.216 1.262 1.360 Period 5 1.051 1.104 1.159 1.217 1.276 1.338 1.469 1.611 1.762 1.331 1.405) 1.482 1.464 1.574 1.689 1.811 1.939 1.925 1.561 1.643 1.728 2.074 2.100 2.288 2488 Period 6 1.062 1.126 1.194 1.265 1.340 1.419 1.587 1.772 Period 7 1.072 1.149 1.230 1.316 1.407 1.504 1.714 1.949. Period 8 1.083 1.172 1.267 1.369 1.477 Period 9 1.094 1.195 1.305 1.423 1.551 Period 10 1.105 1.219 1.344 1.480 1.629 1.791 Period 11 1.116 1.243 1.384 1.539 1.710 1.594 1.851 1.689 1.999 2.159 1.898 2.332 1.974 2.211 2.144 2.476 2.853 2.358 2.773 3.252 2.195 2.436 2.700 2.986 2.502 2826 3.185 3.583 3.278 3.759 4.300 3.803 4.435 5.160 2.594 3.106 3,707 4.411 5.234 6.192 2.853 3.479 4.226 5.117 6.176 7.430 Period 12 1.127 1.268 1.426 1.601 1.796 2012 2.518 3.138 3.896 4.818 5.936 7.288 8.916 Period 13 1.138 1.294 1.469 Period 14 1.149 1.319 Period 15 1.161 1.346 1.558 1.665 1.886 2.133 2.720 3.452 4.363 1.513 1.732 1.980 2.261 2.937 3.797 4.887 1.801 2.079 2.397 1.220 Period 20 1.486 1.806 2.191 2.653 3.207 1.282 Period 25 1.641 2.094 2.666 3.386 4.292 Period 30 1.348 1.811 2.427 3.243 4.322 5.743 Period 40 1.489 2.208 3.262 4.801 5.492 6.886 8.599 10.699 6.261 7.988 10.147 12.839 3.172 4.177 5474 7.138 9.266 11.974 15.407 4.661 38.338 6.727 9.646 13.743 19.461 27.393 6.848 10,835 17.000 26.462 40.874 62.669 95.396 10.063 17.449 29.960 50.950 85.850 143.371 237.376 7.040 10.286 21.725 45.259 93.051 188.884 378.721 750.378 1,469.772 Reference Future Value of Annuity of $1 Periods Period 1 1% 2% 3% 4% 5% 6% 1.000 1.000 1.000 1.000 1.000 8% 1.000 1,000 1.000 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 2.180 2.200 Period 3 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3.572 3.640 Period 4 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.066 5.215 5.368 Period 5 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.442 Period 6 6.152 6.308 6.468 6.633 Period 7 7.214 7.434 7.662 7.898 Period 8 8.286 Period 9 Period 10 8.583 8.892 9.214 9.369 6.975 7.336 8.394 8.923 9.549 9.897 10.637 11:436 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 6.802 8.142 7.716 8.115 8.536 8.977 9.442 9.930 9.487 10.089 10.730 11.414 12.142 12.916 12.300 13.233 14.240 15.327 16.499 16.085 17.519 19.086 20.799 19.337 21.321 23.521 25.959 Period 11 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 Period 12 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 Period 13 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 Period 14 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 Period 15 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 Period 20 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 Period 25 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 249.214 Period 30 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 356.787 530.312 790.948 1,181.882 Period 40 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442 593 767.091 1,342.025 2,360.757 4,163.213 7,343.858 23.045 25.733 28.755 32.150 27.271 30.850 34.931 39.581 32.089 36.786 42.219 48.497 37.581 43.842 43.672 50.818 59.196 51.660 60.965 72.035 115.380 146 628 186.688 342.603 471.981 Scenario 1. Jeff just hit the jackpot in Las Vegas and won $65,000r if he invests it now, at a 14% interest rate, how much will it be worth in 20 years? (Round your ww to the newest whole due) Future value Scenario 2. Bob would ke to have $2.000,000 saved by the time he retires in 30 years. How much does he need to invest now at a 10% interest rate to fund his retirement goal? (Round your answer to the who dollar) Present value Scenario 3. Assume that Tina accumulates savings of $1 million by the time she retires. If she invests this savings at 10%, how much money will she be able to withdraw at the end of each year for 20 years? (Round y answer to the nearest whole dollar and enter as a positive amount) Amount able to withdraw Amount able to withdraw Scenario 4. Ivana plans to invest $2,500 at the end of each year for the next eight years. Assuming a 14% interest rate, what will her investment be worth eight years from now? (Round Future value Scenario 5. Assuming a 12% interest rate, how much would Tem have to invest now to be able to withdraw $14,000 at the end of every year for the next nine years? (Round your answe Present value Scenario 6. Roy is considering a capital investment that costs $520,000 and will provide tiet cash inflows for three years, Using a hurdle rate of 8%, find the NPV of the investment (Rou dollar. Use parentheses or a minus sign to represent a negative NPV) Net Present Value (NPV) Scenario 7. What is the IRR of the capital investment described in Question 6? The IRR is the interest rate at which the investment NPV 0. We tried 8% in question 6, now we'll try 10% and calculate the NPV. (Round your answer a negative NPV) Net Present Value (NPV) The IRR for the project is