Time Value of Money Project- ALL work needs to be shown for each problems (1-7)

1) Mrs. Beach wants to invest a lump sum of money today to have $100,000 when she retires at 65 (she is 40 today).

a. Hom much of a deposit would she have to make if the interest rate on the C.D. was 5%?

b. What would Mrs. Beach have to deposit is she were to use high quality corporate bonds an earned an average rate of return 7%?

c. What would Mrs. Beach have to seposit if she were to use common stock and earned an average rate of return of 11%?

d. What type of problem is this?

2) You have payment that is due in 5 years for $50,000. You can earn a 5% safe rate return on your money.

a. How much would you have to set aside today to meet this payment in the future? b. If your rate of return is 8%, how much would you have to set aside today? c. If your rate is 10%, how much would you have to set aside today? d.what type of problem is this?

3. You want to save enough money to retire as a millionaire. a. If you could earn 10% with common stocks, how much would you have to set aside per year to have $1,000,000 when you are 65? b. If you were going to make deposit monthly, how much would would you have to set aside per month to have $1,000,000 when you are 65? c. If you were able to earn 11% how much would you have to set aside per month to have $1,000,000 when you are 65? d. What type of problem is this? 4. 4. If you were going to but your office from Mrs. Beach for $500,000 with 10% down payment and 15 years with a 6% interest rate. a. How much would your payment be each month? b. What would be the principal and interest payment on the twelth payment? c. What would be the principal & interest payment on the twlfth payment? d. What type of problem is this?

5. Same problem as above, but assume that the loan was for 20 years: a. What is the new payment? b. What would be the principal & interest payment on the first payment. c. What would be the principal & interest payment on the twelth payment? d. What type of problem is this? 6. You want to purchase a truck for $25,000 and you have $3450 to put down. a. How much will your payments be if you financed the truck for 60 months at 6%? b. How much would the payments if the rate of interest is 5% and you only financed the truck for 48 months? c. Assuming that you would only finance the truck for 4 years, how much would you need to put down to get your payments to $450.000? d. What type of problem is this? 7. You have $350.00 per month to spend on a car payment. If your credit union charged 7.5% interest on a used car, how much car can you purchase if you will only finance for 4 years?