Question
You plan to save for a Caribbean cruise. You deposit $500 today, $250 in two years, and $1,000 in three years. If your investment account
You plan to save for a Caribbean cruise. You deposit $500 today, $250 in two years, and $1,000 in three years. If your investment account earns 9 percent per year, how much will you have in five years? Does the question ask or are the payments at the beg(gining) or end of the periods?____________ What unit of time answers the question? _______________ Do I need to convert other variables to the answers unit of time? __________ Circle the variable below that answers the question. N = I = PV = PMT = FV =
8. (2pts) Which do you prefer: (1) receiving $1,300 in six years when the annual interest rate is 6 percent compounded quarterly or (2) receiving $1,500 in six years when the annual interest rate is 6 percent compounded semi-annually? Does the question ask or are the payments at the beg(gining) or end of the periods?____________ What unit of time answers the question? _______________ Do I need to convert other variables to the answers unit of time? __________ Circle the variable below that answers the question. N = I = PV = PMT = FV =
9. (1pt) You won a lawsuit and the court ordered the defendant to pay you $500 / month starting today then $500 at the beginning of each month for three years. If the appropriate annual discount rate is 8 percent, what is the value of your settlement today? Does the question ask or are the payments at the beg(gining) or end of the periods?____________ What unit of time answers the question? _______________ Do I need to convert other variables to the answers unit of time? __________ Circle the variable below that answers the question. N = I = PV = PMT = FV =
10. (3pts) Jim plans to retire Jan 1, 2031 (when he is 67 | today is Jan 1, 2020). He expects to live exactly 20 years in retirement (DoD Dec 31, 2051). His desire is to have $4,000 per month income in retirement from his portfolio with no legacy. Today, his investment portfolio has $98,114.18, and is expected to average 5.0%/year return until he dies. How much per month must he deposit in his portfolio during his working years? Does the question ask or are the payments at the beg(gining) or end of the periods?____________ What unit of time answers the question? _______________ Do I need to convert other variables to the answers unit of time? __________ Circle the variable below that answers the question. N = I = PV = PMT = FV =
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