Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Provided are links to the present and future value tables: ( PV of $ 1 , FV of $ 1 , PVA of $ 1

image text in transcribed
Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1)(Use appropriate factor(s) from the tables provided.)
a. How much would you have to deposit today if you wanted to have $60,000 in four years? Annual interest rate is 9%.
b. Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 8% on your investments, how much would you have to deposit today to have $15,000 when you graduate? (Round your answer to 2 decimal places.) c-1. Calculate the future value of an investment of $463 for 10 years earning an interest of 9%.(Round your answer to 2 decimal places.)
c-2. Would you rather have $463 now or $1,000 ten years from now?
d. Assume that a college parking sticker today costs $90. If the cost of parking is increasing at the rate of 5% per year, how much will the college parking sticker cost in eight years? (Round your answer to 2 decimal places.)
e. Assume that the average price of a new home is $158,500. If the cost of a new home is increasing at a rate of 10% per year, how much will a new home cost in eight years? (Round your answer to 2 decimal places.)
f. An investment will pay you $10,000 in 10 years, and it also will pay you $400 at the end of each of the next 10 years (years 1 through 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your answer to nearest whole dollar.)
g. A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now. Instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual interest rate is 6% what is the present value (today's amount) that she won? (Ignore taxes.)
Answer is complete but not entirely correct.
\table[[a. Present value,$,42,504
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

27th edition

978-1337272094, 1337272094, 978-1337514071, 1337514071, 978-1337899451

More Books

Students also viewed these Accounting questions

Question

e. What age client does the person see?

Answered: 1 week ago

Question

Identify the process of new product development.

Answered: 1 week ago

Question

Describe the process of building a sport brand.

Answered: 1 week ago