Please help personal finance
Time Value of Money Problems Handout 2 1. You're trying to save up for a big vacation. You want to take a trip around the world when you graduate in three years. If you can earn 16% on your investments, how much would you have to deposit in order to have $20,000 when you graduate? 2. Would you rather have $463 now or $1000 10 years from now? You can earn 6% on any investments. 3. You can buy a mortgage from a mortgage broker. Mortgage payments are $30,000 per year and there are 16 years to maturity. The broker is asking $325,000 for the note. You already hold similar mortgages and they yield 12%. Should you buy this note? 4. At an interest rate of 12% how long would it take a sum of money to double? 5. At 8% how long would it take to triple your money? 6. Your uncle lends you $1000 today with the promise that you pay him back $1728 in three years. What rate of interest is he charging you? 7. Your company is required to pay into a sinking fund each year in order to meet an obligation which matures in 10 years. The amount of the obligation is $100,000 and you can earn 4% on your deposits. How much must your company deposit each year in order to meet these needs? 8. Your company borrows $150,000 agreeing to pay the balance in 10 equal installments to include principal plus 8% interest. What should the Wblem Se X PDF File X G successful college writing textbor x + C:/Users/CAU%20Student/Downloads/TVM%20Problem%20Set%232.pdf $1728 in three years. what rate of interest is ne charging you? 7. Your company is required to pay into a sinking fund each year in order to meet an obligation which matures in 10 years. The amount of the obligation is $100,000 and you can earn 4% on your deposits. How much must your company deposit each year in order to meet these needs? 8. Your company borrows $150,000 agreeing to pay the balance in 10 equal installments to include principal plus 8% interest. What should the payments be? 9. Your aunt is 80 years old. Over the years she has accumulated savings of $170,000. She estimates that she will live another 10 years at the most and wants to spend her savings. She places her money in an account earning 7%. She will make 10 equal annual withdrawals. How much will she be able to withdraw each year? 10.A firm purchases 100 acres of land for $200,000 and agrees to remit 20 equal annual installments of $41,067 each. What is the annual interest rate on this loan? 1. Find the interest rates or rates of return on each of the following: ere to search W O11.Find the interest rates or rates of return on each of the following: a. You borrow $200 and promise to pay back $210 at the end of one year. b. You borrow $20,000 and promise to pay back $32,578 at the end of 10 years. c. You borrow $2000 and promise to make payments of $514.18 per year for five years 12. You borrow $15,000 and agree to repay the balance in five equal annual installments to include principal plus 8% interest. What should the payments be? 13. Your company has a $1,000,000 bond issue that matures in 15 years. The bond indenture requires annual payments into a sinking fund. You figure that you can earn 10% on all deposits. What must the sinking fund payments be, assuming they are equal? 14. You are paying into a sinking fund that earns 6%. If the payments are $15,000 per year, how much will be in the fund in 15 years? 15. Your broker offers to sell you a note for $11,300 that will pay $2000 per year for 10 years. If you buy the note, what rate of interest will you be earning? search 19 W
