See attached assignment for full set of questions.

Below are a few examples of questions:

What would the future value of $500 be after 5 years at 10% compound interest?

At 10% simple interest?

Suppose you currently have $3,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 2% interest compounded annually. How much will you have when the CD matures?

Basic Time-Value of Money Problems Total Number of Questions: 31 1a. What would the future value of $500 be after 5 years at 10% compound interest? N I PV PMT 5 10% $500 $0 FV = 1b. At 10% simple interest? N I PV PMT 5 10% $500 $0 Annual interest Total interest $50.00 = 5*10 but use cells in the forumula FV = 2. Suppose you currently have $3,000 and plan to purchase a 3-year certificate of deposit (CD) that pays N I PV PMT 3 2% $3,000 $0 FV = 3a. Suppose a U.S. government bond promises to pay $3,000 three years from now. If the going interest N I PMT FV 3 4% $0 $3,000 PV = 3b. How would your answer change if the bond matured in 5 rather than 3 years? N I PMT FV 5 4% $0 $3,000 PV = 3c. What if the interest rate on the 5-year bond was 6% rather than 4%? N I PMT FV 5 6% $0 $3,000 PV = 4a. How much would $1,000,000 due in 100 years be worth today if the discount rate was 3%? N 100 I PMT FV 3% $0 $1,000,000 PV = 4b. If the discount rate was 20%? N I PMT FV 100 20% $0 $1,000,000 PV = 5a. The U.S. Treasury offers to sell you a bond for $600. No payments will be made until the bond matur N PMT PV FV 10 $0 $600.00 $1,000 I = 5b. What rate would you earn if you could buy the bond for $550? N PMT PV FV 10 $0 $550.00 $1,000 I = 5c. For $900? N PMT PV FV 10 $0 $900.00 $1,000 I = 6a. Roberts Corporation earned $0.70 per share in 1999. Ten years later, in 2009, it earned $1.62. What w N PMT PV FV 10 $0 $0.70 $1.62 I = 6b. If EPS in 2009 had been $1.00 rather than $1.62, what would the growth rate have been? N PMT PV FV 10 $0 $0.70 $1.00 I = 7a. How long would it take $1,000 to triple if it were invested in a bank that pays 6% per year? (Hint: For I PMT PV FV 6% $0 $1,000 $3,000 N= 7b. How long would it take if the rate was 10%? I PMT PV FV 10% $0 $1,000 $3,000 N= 8a. What is the PV of an ordinary annuity with 12 payments of $200 if the appropriate interest rate is 10% N I PMT FV 12 10% -$200 $0 PV = 8b. What would the PV be if the interest rate was 4%? N I PMT FV 12 4% -$200 $0 PV = 8c. What if the interest rate was 0%? N I PMT FV 12 0% -$200 $0 PV = 8d. How would the PV values differ if we were dealing with annuities due? Part a N I PMT FV PV 12 10% -$200 $0 $1,499.01 Part b N I PMT FV PV = 12 4% -$200 $0 Part c N I PMT FV PV 12 0% -$200 $0 9a. Suppose you inherited $1,000,000 and invested it at 5% per year. What is the most you could withdra N I PV FV 10 5% $1,000,000 $0 PMT = 9b. How would your answer change if you made withdrawals at the beginning of each year? N I PV FV 10 5% $1,000,000 $0 PMT = 10a. If you had $100,000 that was invested at 8% and you wanted to withdraw $10,000 at the end of each I PV PMT FV 8.0% $100,000 -$10,000 $0 N = 10b. How long would they last if you earned 0%? I PV PMT FV 0.0% $100,000 -$10,000 $0 N = 11a. What's the future value of $100 after 3 years if the appropriate interest rate is 5%, compounded ann N I PV PMT 3 5% -$100 $0 FV = 11b. Compounded monthly? N I PV PMT 36 0.42% -$100 $0 FV = 12a. What's the present value of $100 due in 3 years if the appropriate interest rate is 6%, compounded a N I PMT FV 3 6% $0 $100 PV = 12b. Compounded monthly? N I PMT FV 36 0.5% $0 $100 PV = 13. A bond that matures in 10 years has a par value of $1,000, an annual coupon payment of $60; its ma Years to maturity Annual payment Par value Going rate, rd 10 $60 $1,000 9% Value of bond = 14. A bond that matures in 12 years has a par value of $1,000 and an annual coupon of 12%; the market Years to maturity Coupon rate Annual payment Par value Going rate, rd 12 12% $120 $1,000 8% Value of bond = 15. Halley Enterprises' bonds currently sell for $950. They have a 7-year maturity, an annual coupon of $ Hint: Find using the RATE function Years to maturity 7 Annual payment $85.00 Current price -$950.00 Par value = FV $1,000.00 YTM = Required rate, rd: 16. Last year a firm issued 22-year, 9% annual coupon bonds at a par value of $1,000. Suppose that one What is the new price of the bonds assuming that they now have 19 years to maturity? Years to maturity Coupon rate Annual payment Par value Required rate, rd Value of bond = 21 9% $90 $1,000 6% n the forumula deposit (CD) that pays 2% interest compounded annually. How much will you have when the CD matures? w. If the going interest rate on 3-year government bonds is 4%, how much is the bond worth today? ate was 3%? e until the bond matures 10 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if t earned $1.62. What was the growth rate in Roberts Corporation's earnings per share (EPS) over the 10-year period? % per year? (Hint: For these type of problems use the "NPER" Function) ate interest rate is 10%? most you could withdraw at the end of each of the next 10 years and have a zero balance at Year 10? 000 at the end of each year, how long would your funds last? 5%, compounded annually? e is 6%, compounded annually? payment of $60; its market interest rate is 9%. What is its price? on of 12%; the market interest rate is 8%. What is its price? an annual coupon of $85, and a par value of $1,000. What is their yield to maturity? 000. Suppose that one year later the going rate drops to 6%. st rate would you earn if you bought this bond for $585.43? 10-year period? Intermediate Time-Value of Money Problems Total Number of Questions: 12 1a. What's the present value of a 5-year ordinary annuity of $200 plus an additional $1000 at the end of Y Interest rate Year Ann Pmt Lump Sum Total CFs 6% 0 $0 1 $200 2 $200 3 $200 4 $200 $0 $200 $200 $200 $200 5 $200 $1,000 $1,200 NPV 1b. What is the PV if the $100 payments occur in Years 1 through 10 and the $1000 comes at the end of Y Interest rate Year Ann Pmt Lump Sum Total CFs 6% 0 $0 1 $200 2 $200 3 $200 4 $200 5 $200 $0 $200 $200 $200 $200 $200 NPV 2a. What's the present value of a 5-year ordinary annuity of $350 plus an additional $1000 at the end of Y Interest rate Year Ann Pmt Lump Sum Total CFs 6% 0 $0 1 $350 2 $350 3 $350 4 $350 $0 $350 $350 $350 $350 5 $350 $1,000 $1,350 NPV 2b. What is the PV if the $350 payments occur in Years 1 through 10 and the $1000 comes at the end of Y Interest rate Year Ann Pmt Lump Sum Total CFs 6% 0 $0 1 $350 2 $350 3 $350 4 $350 5 $350 $0 $350 $350 $350 $350 $350 NPV 3. What's the present value of the following uneven cash flow stream: $0 at Time 0, $150 in Year 1 (or at Interest rate 8% Year CFs 0 $0 1 $150 2 $200 3 $0 4 $500 NPV 4. An investment costs $350 and is expected to produce cash flows of $100 at the end of each of the nex What is the expected rate of return on this investment (Internal Rate of Return)? Year Ann Pmt Lump Sum Total CFs 0 -$350 1 $100 2 $100 3 $100 -$350 $100 $100 $100 4 $100 $300 $400 IRR 5. An investment costs $500 and is expected to produce cash flows of $100 at the end Year 1, $200 at the Year CFs 0 -$500 1 $100 2 $200 3 $400 IRR 6. An investment costs $500 and is expected to produce cash flows of $200 at the end of each of the nex What is the expected rate of return on this investment (Internal Rate of Return)? Year Ann Pmt Lump Sum Total CFs 0 -$500 1 $200 2 $200 3 $200 4 $200 5 $200 -$500 $200 $200 $200 $200 $200 IRR 7. An investment costs $600 and is expected to produce cash flows of $50 at the end Year 1, $200 at the What is the expected rate of return on this investment? Year 0 1 2 3 CFs -$600 $50 $200 $450 IRR onal $1000 at the end of Year 5 if the interest rate is 6%? 000 comes at the end of Year 10? 6 $200 7 $200 8 $200 9 $200 $200 $200 $200 $200 10 $200 $1,000 $1,200 onal $1000 at the end of Year 5 if the interest rate is 6%? 000 comes at the end of Year 10? 6 $350 7 $350 8 $350 9 $350 $350 $350 $350 $350 10 $350 $1,000 $1,350 me 0, $150 in Year 1 (or at Time 1), $200 in Year 2, $0 in Year 3, and $500 in Year 4 if the interest rate is 8%? he end of each of the next 4 years, then an extra lump sum payment of $300 at the end of the 4th year. he end Year 1, $200 at the end or Year 2, and $400 at the end of Year 3. What is the expected rate of return on this investment? he end of each of the next 6 years, then an extra lump sum payment of $300 at the end of the 6th year. 6 $200 $300 $500 he end Year 1, $200 at the end or Year 2, and $450 at the end of Year 3. turn on this investment