What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk pay 4 annually Do not round intermediate calculations Round your answer to the nearest cent Your parents will retire in 24 years They currently have $350,000 saved, and they think they will need $1,950,000 at retirement What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds Round your answer to two decimal places If you deposit money today in an account that pays 4 annual interest, how long will it take to double your money Round your answer to two decimal places years What's the future value of a 10 , 5 year ordinary annuity that pays $500 each year If this was an annuity due, what would its future value be Do not round intermediate calculations Round your answers to the nearest cent Future Value of an Ordinary Annuity $ Future Value of an Annuity Due $ How long will it take $600 to double if it earns the following rates Compounding occurs once a year Round your answers to two decimal places 8 year(s) 14 year(s) 21 year(s) 100 year(s) Find the present values of these ordinary annuities Discounting occurs once a year Do not round intermediate calculations Round your answers to the nearest cent $400 per year for 10 years at 6 $ $200 per year for 5 years at 3 $ $400 per year for 5 years at 0 $ Rework previous parts assuming they are annuities due Present value of $400 per year for 10 years at 6 $ Present value of $200 per year for 5 years at 3 $ Present value of $400 per year for 5 years at 0 $ What is the present value of a $500 perpetuity if the interest rate is 4 If interest rates doubled to 8 , what would its present value be Round your answers to the nearest cent Present value at 4 $ Present value at 8 $ Find the present values of the following cash flow streams at a 6 discount rate Do not round intermediate calculations Round your answers to the nearest cent 0 1 2 3 4 5 Stream A $0 $100 $450 $450 $450 $300 Stream B $0 $300 $450 $450 $450 $100 Stream A $ Stream B $ What are the PVs of the streams at a 0 discount rate Round your answers to the nearest dollar Stream A $ Stream B $ Find the present value of $500 due in the future under each of these conditions 12 nominal rate, semiannual compounding, discounted back 7 years Do not round intermediate calculations Round your answer to the nearest cent $ 12 nominal rate, quarterly compounding, discounted back 7 years Do not round intermediate calculations Round your answer to the nearest cent $ 12 nominal rate, monthly compounding, discounted back 1 year Do not round intermediate calculations Round your answer to the nearest cent $ You have saved $5,000 for a down payment on a new car The largest monthly payment you can afford is $450 The loan will have a 9 APR based on end of month payments What is the most expensive car you can afford if you finance it for 48 months For 60 months Do not round intermediate calculations Round your answers to the nearest cent Financed for 48 months $ Allison and Leslie, who are twins, just received $50,000 each for their 21th birthday They both have aspirations to become millionaires Each plans to make a $5,000 annual contribution to her early retirement fund on her birthday, beginning a year from today Allison opened an account with the Safety First Bond Fund, a mutual fund that invests in high quality bonds whose investors have earned 8 per year in the past Leslie invested in the New Issue Bio Tech Fund, which invests in small, newly issued bio tech stocks and whose investors have earned an average of 18 per year in the fund's relatively short history If the two womens funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire Do not round intermediate calculations Round your answers to two decimal places Allison years Leslie years How large would Allison's annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming their expected returns are realized Do not round intermediate calculations Round your answer to the nearest cent $ Six years from today you need $10,000 You plan to deposit $1,500 annually, with the first payment to be made a year from today, in an account that pays a 5 effective annual rate Your last deposit, which will occur at the end of Year 6, will be for less than $1,500 if less is needed to reach $10,000 How large will your last payment be Do not round intermediate calculations Round your answer to the nearest cent $ Financed for 60 months $

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What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk pay 4% annually? Do not

What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk pay 4% annually? Do not round intermediate calculations. Round your answer to the nearest cent.

Your parents will retire in 24 years. They currently have $350,000 saved, and they think they will need $1,950,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.

If you deposit money today in an account that pays 4% annual interest, how long will it take to double your money? Round your answer to two decimal places.

years

What's the future value of a 10%, 5-year ordinary annuity that pays $500 each year? If this was an annuity due, what would its future value be? Do not round intermediate calculations. Round your answers to the nearest cent.

Future Value of an Ordinary Annuity: $

Future Value of an Annuity Due: $

How long will it take $600 to double if it earns the following rates? Compounding occurs once a year. Round your answers to two decimal places.

8%.

year(s)
14%.

year(s)
21%.

year(s)
100%.

year(s)

Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

$400 per year for 10 years at 6%.

$
$200 per year for 5 years at 3%.

$
$400 per year for 5 years at 0%.

$
Rework previous parts assuming they are annuities due.

Present value of $400 per year for 10 years at 6%: $

Present value of $200 per year for 5 years at 3%: $

Present value of $400 per year for 5 years at 0%: $

What is the present value of a $500 perpetuity if the interest rate is 4%? If interest rates doubled to 8%, what would its present value be? Round your answers to the nearest cent.

Present value at 4%: $

Present value at 8%: $

Find the present values of the following cash flow streams at a 6% discount rate. Do not round intermediate calculations. Round your answers to the nearest cent.

0 1 2 3 4 5

Stream A $0 $100 $450 $450 $450 $300

Stream B $0 $300 $450 $450 $450 $100

Stream A: $

Stream B: $
What are the PVs of the streams at a 0% discount rate? Round your answers to the nearest dollar.
Stream A: $

Stream B: $

Find the present value of $500 due in the future under each of these conditions:

12% nominal rate, semiannual compounding, discounted back 7 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$
12% nominal rate, quarterly compounding, discounted back 7 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$
12% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent.

$

You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $450. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent.

Financed for 48 months: $

Allison and Leslie, who are twins, just received $50,000 each for their 21th birthday. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Allison opened an account with the Safety First Bond Fund, a mutual fund that invests in high-quality bonds whose investors have earned 8% per year in the past. Leslie invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors have earned an average of 18% per year in the fund's relatively short history.

If the two womens funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire? Do not round intermediate calculations. Round your answers to two decimal places.

Allison: years

Leslie: years
How large would Allison's annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming their expected returns are realized? Do not round intermediate calculations. Round your answer to the nearest cent.

$

Six years from today you need $10,000. You plan to deposit $1,500 annually, with the first payment to be made a year from today, in an account that pays a 5% effective annual rate. Your last deposit, which will occur at the end of Year 6, will be for less than $1,500 if less is needed to reach $10,000. How large will your last payment be? Do not round intermediate calculations. Round your answer to the nearest cent.

Financed for 60 months: $