| If you made a $73,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | a. | Compute the future value of $2,000 compounded annually for 20 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | | b. | Compute the future value of $2,000 compounded annually for 15 years at 9 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | | c. | Compute the future value of $2,000 compounded annually for 25 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | | Future value | For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): | | Present Value | Years | | Interest Rate | Future value | | $ | 14 | | 8 | % | | $ | 14,551 | | | | 5 | | 14 | | | | 42,557 | | | | 30 | | 15 | | | | 877,073 | | | | 35 | | 8 | | | | 541,164 | | | | Hints References eBook & Resources Hint #1 | Wilkinson Co. has identified an investment project with the following cash flows: | | Year | | Cash Flow | | | 1 | | | $ | 840 | | | | 2 | | | | 1,170 | | | | 3 | | | | 1,430 | | | | 4 | | | | 1,575 | | | | | If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | | If the discount rate is 16 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | | If the discount rate is 25 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) | Hints References eBook & Resources Four months ago, you purchased 1,400 shares of Lakeside Bank stock for $23.32 a share. You have received dividend payments equal to $.55 a share. Today, you sold all of your shares for $24.32 a share. What is your total dollar return on this investment? $770 $1,540 $2,170 $4,340 $1,400 | Suppose a stock had an initial price of $54 per share, paid a dividend of $1.30 per share during the year, and had an ending share price of $64. | | Compute the percentage total return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) | References eBook & Resources WorksheetDifficulty: 1 BasicSection: 10.1 Returns Check my work | ouve observed the following returns on SkyNet Data Corporations stock over the past five years: 17 percent, 15 percent, 19 percent, 29 percent, and 10 percent. Suppose the average inflation rate over this period was 2.6 percent, and the average T-bill rate over the period was 4.3 percent. | | a. | What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) | | b. | What was the average nominal risk premium on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) | | Average nominal risk premium | % | Hints References eBook & Resources | $ | |
