Question
Suppose you just turned 19. A rich uncle has set up a trust fund for you that will pay you $100,000 when you turn 30.
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Suppose you just turned 19. A rich uncle has set up a trust fund for you that will pay you $100,000 when you turn 30. If the relevant discount rate is 9%, how much is this fund worth today?
$91,743.12
$50,251.26
$38,753.29
$7,537.11
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You just won the lottery. You have the option of receiving $100,000 at the beginning of every year for the next 10 years OR receiving a lump sum award today. Suppose your required rate of return is 6.5%. If you were to be indifferent between the two options, how much should the lump sum award be?
$765,610.42
$1,000,000.00
$1,349,442.25
$718,883.02
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You plan to do an MBA in five years. You anticipate that you will need $100,000 by that time to enroll in your program of choice. You decide to start saving for this now by making equal monthly deposits into a fund with an expected return of 9%, compounded monthly(r12=12%). You plan to make the deposits at the end of every month for the next five years. If you are to achieve your goal of $100,000, how much should your monthly deposit be?
$1,666.67
$1289.20
$1,325.84
$1,315.97
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Mark recently received a credit card with an 15% interest rate, compounded monthly (r12 = 15%). With the card, he purchases an Apple iPhone 11 for $599. The minimum payment on the card is only $24.99 per month. If Mark makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Round to the next whole month.
29 months
50 months
Cannot be determined.
24 months
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