Solve various time value of money scenarios Scenario 1. Irving just hit the jackpot in Las Vegas and won $35,000 l If he invests it now, at a 12%, interest rate, how much will it be worth in 15 years? (Round your answer to the nearest whole dollar) Future value = Scenario 2. Inman would like to have $4,000,000 saved by the time he retires in 40 years. How much does he need to invest now at a 12% interest rate to fund his retirement goal? (Round your answer to the nearest whole dollar.) Present value = Scenario 3. Assume that Zoey accumulates savings of $1.5 million by the time she retires. If she invests this savings at 12%, how much money will she be able to withdraw at the end of each year for 20 years? (Round your answer to the nearest whole dollar and enter as a positive amount) Amount able to withdraw "= Scenario 4. Jessica plans to invest $6,000 at the end of each year for the next seven years. Assuming a 10% interest rate; what will her investment be worth seven years from now? (Round your answer to the nearest Scenario 5. Assuming a 10% interest rate, how much would Danielle have to invest now to be able to withdraw 514,000 at the end of every year for the next ten years? (Round your answer to the nearest whole dollar) Present value = Scenario 6. Booker is considering a capital investment that costs $515,000 and will provide net cash inflows for three years, Using a hurdle rate of 10%, find the NPV of the investment. (Round your answer to the nearest whole 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 10% in question 6, now we'll try 12% and calculate the NPV. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign to represent a negative NPV) Net Present Value (NPV) The IRR for the project is 1. Irving just hit the jackpot in Las Vegas and won $35,000 I If he invests it now, at a 12% interest rate, hw much will it be worth in 15 years? 2. Inman would like to have $4,000,000 saved by the time he retires in 40 years. How much does he need to invest now at a 12% interest rate to fund his retirement goal? 3. Assume that Zoey accumulates savings of $1.5 million by the time she retires. If she invests this savings at 12%, how much money will she be able to withdraw at the end of each year for twenty years? 4. Jessica plans to invest $6,000 at the end of each year for the next seven years. Assuming a 10% interest rate, what will her investment be worth seven years from now? 5. Assuming a 10% interest rate, how much would Danielle have to invest now to be able to withdraw $14,000 at the end of every year for the next ten years? 6. Booker is considering a capital investment that costs $515,000 and will provide the following net cash inflows. following net cash inflows: Using a hurdle rate of 10%, find the NPV of the investment. 7. What is the IRR of the capital investment described in Question 6
