Finance: Final (Chapter 5 Quizzes/Homework)

69,227.13

An investment requires an outlay of $100,000 today. Cash inflows from the investment are expected to be $40,000 per year at the end of years 4, 5, 6, 7, and 8. If you require 20% rate of return on this, should the investment be undertaken?

6,162.17

$30,000 loan obtained today is to be repaid in equal annual installments over next 7 years starting at end of this year. If the annual interest rate is 10%, how much is to be paid each year?

194,244.98

beginning a year from now, Sameer will receive $20,000 a year from his pension fund. there will be fifteen of these annual payments. what's the present value of these payments if a 6% annual interest rate is applied as a discount rate?

839,343.12

consider individual who sets aside $3,000 at the beginning of each year for the next 40 years in an IRA account at 8%. find the future value of these deposits.

a. 3,581.70 b. 4,734.73 c. 6,414.27

find the future value of $2,000 for: a. 10 years at 6% b. 10 years at 9% c. 20 years at 6%

20,680

find the future value of annuity of $400, monthly, that pays 3.75% annual rate, in 4 years.

a. 7,835.26 b. 6,139.13 c. 6,209.21

find the present value of $10,000 to be received in: a. 5 years at 5% b. 10 years at 5% c. 5 years at 10%

6,321.86

find the present value of $8100 to be paid in three equal payments -- the first payment of $2700 is to be made immediately (at time 0), the second of $2700 to be paid in 5 years (at time 5), and the final payment of $2700 to be made in 10 years (at time 10). the interest rate is 5.6%.

113,243.25

find the present value of the following stream of cash flows: $12,000 over years 1-5 $7,000 over years 6-11 $15,000 over years 12-20 use interest rate of 7.65%

6,363.17

given an 8% interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of $1,000, 1,200, 1,200, and 1,500 respectively.

19.65

how long would it take an investment to triple in value if the annual return is 5.75%?

b (a=5000, b=9748.97, c=8,060.69)

if you require a 9% return on your investments, which would you prefer: a) 5,000 today b) 15,000 five years from today c) 1000 per year for 15 years

a. 10.20 b. 22.50

solve for the unknown interest rate in each: a. present value=51,000; years=12; future value=163,500; interest ? b. PV=20,750; years=5; FV=57,230; interest ?

8.1

solve for the unknown number of periods in each of the following cases: a. PV=18400, i=6%, FV=29500, years ?

7,083.75

susan is planning for her retirement. she's 30 today and would like to have $600,000 when she turns 55. she estimates that she'll be able to earn a 9% rate of return on her retirement investments over time; she wants to et aside a constant amount to money every year (at the end of the year) to help achieve her objective. how much money must Susan invest at the end of each of the next 25 years to realize her goal?

43.54

the lending spree company will lend you $20,000 today with terms that require you to pay-off the loan in 48 monthly installments of $800 each. what is the effective annual rate of interest that ht lending spree company is charging you?

15,791.93

using an interest rate of 7% per year, what's the value today of the following cash flows: - year 1: $0 - year 2: $0 - year 3: $10,000 - year 4: $10,000

825,197.16

you deposit $12000 at the end of each year in a 401k, how much will you have in 30 years if you can earn 5.2% per year?

406,058.82

you deposit $6,000 at the beginning of each year in a retirement account paying 7% interest. how much will you have in 25 years?

9.006

you invest $25,000 in an account that will earn interest at a rate of 8% per year. How long will it take to double your investment?

a. 54,172.88 b. 61,820.25

you just received a windfall form an investment you made. you'll be receiving $10,000 at the end of this year, $20,000 at the end of the following year, and $30,000 at the end of year after that. the interest rate is 4.5% per year. a. what is the present value of your windfall? b. what is the future value of your windfall in three years?

3.76

you made a $5,000 investment 10 years ago. you were happy to find that it is worth today $7,230. what was the annual return not his investment?

30,667.52

you plan to borrow $150,000 and are considering the following loan term and repayment schedule: a six-year loan with annual rate of 6.17%; this loan has equal annual payments over 6 years. calculate the annual payments

252.15

you want to borrow $15,000 today to purchase a car. if the bank charges you 6.5% interest per year for a 6 year loan, what are your monthly payments?

31,410.24

you'd like to buy a house in 4 years. you'd like to have $40,000 as a down payment. how much should you save today if you can earn 6.23%?

11,056.54

you're thinking of buying a new car. You bought your current car exactly 3 years ago fro $25,000 and financed it at 7% APR for 60 months. You need to estimate how much you owe on the loan to make sure the you can pay it off when you sell the old car.

8.98

you've borrowed $14,300 at annual interest rate of 15%. you feel that you'll be able to make annual payments of $3,000 per year on your loan. how long will it be before the loan is entirely paid off?

-2984.97; bad investment opportunity

a business proposition by your best friend entails investing $20,000 today in return for $5,0000 in year 2, $6,000 in year 3, $8,000 in year 5, and $4,000 in year 6. If you want to make 8% on your investment, is this a good investment opportunity?

7.20

a gallon of milk is currently selling $4.62. if dairy prices are increasing at a rate of 3% per year, how much will a gallon of milk cost in 15 years?

13,019.63

Claude is 82 yrs old. over the years, he's accumulated savings of $80,000. he estimates he'll live another 10 yrs at the most and wants to spend his savings by then. He places his $80,000 into an account earning 10% annually & sets it up in such a way that he'll be making 10 equal annual withdrawals -- the first one occurring one year from now and such that his account balance will be zero at the end of 10 years (after the last withdrawal). how much will he be able to withdraw each year?

777,169.56

If he invests $3,000 at end of each year into a portfolio that earns 8% per year, how much will he have at end of 40 yrs?

a. 5.25 b. 5.38 c. 5.39

an internet company is offering a money market account with an APR of 5.25%. what is the effective annual interest rate offered by the company if the compounding interval is: a. annually b. monthly c. daily

37,069.95

Smart Deals has offered you the following investment opportunity: - $5,000 at then end of each year for the first 6 years - $7,000 at the end of each year from years 7-10 - $9,000 at the end of each year from years 11-15 how much are you willing to pay for this investment if you want to make 14% rate of return?