Question
Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use
Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.
a. How much would you have to deposit today if you wanted to have $57,000 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 $15,500 when you graduate? Note: Round your answer to 2 decimal places.
c-1. Calculate the future value of an investment of $679 for nine years earning an interest of 10%. Note: Round your answer to 2 decimal places.
c-2. Would you rather have $679 now or $1,800 nine years from now?
d. Assume that a college parking sticker today costs $82. 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? Note: Round your answer to 2 decimal places.
e. Assume that the average price of a new home is $125,000. If the cost of a new home is increasing at a rate of 8% per year, how much will a new home cost in ten years? Note: Round your answer to 2 decimal places.
f. An investment will pay you $10,500 in 10 years, and it also will pay you $310 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? Note: Round your intermediate calculations and final answer to the nearest whole dollar.
g. A college student is reported in the newspaper as having won $11,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $11 million now. Instead she will receive $550,000 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 (todays amount) that she won? (ignore taxes). Note: Round your answer to nearest whole dollar.
Please show your formula and calculations.
a. Present Value
b. Present Value
c-1. Future Value
c-2. Would you rather have $679 now or $1,800 nine years from now?
d. Future Value
e. Future Value
f. Present Value
g. Present Value
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