The time value of money

Assignment Help Risk Management
Reference no: EM131473831

The Time Value of Money

Why should we (managers) learn calculations involving the time value of money? What kind of management decisions does it help us make?

Emily Smith deposits $1,200 in her bank today. If the bank pays 4 percent simple interest, how much money will she have at the end of five years? What if the bank pays compound interest? How much of the earnings will be interest on interest?

Multiple compounding periods: Find the future value of a five-year $100,000 investment that pays 8.75 percent and that has the following compounding periods:

Yearly

Monthly.

Present value: Tracy Chapman is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $35,000 for the down payment. If Tracy can invest in a fund that pays 9.25 percent annually, how much will she need to invest today?

Reference no: EM131473831

Questions Cloud

Explain about struck you as especially interesting : Which of the critical theories that you read about struck you as especially interesting? Give a brief sense of how you might apply .
How do the given hinder implementing strategy in a company : How do these hinder implementing strategy in a company. Benefits of implementing a performance management system?
Illustrate the case study of mountain camo inc : In October, 2003, Mountain Camo, Inc. entered into a contract with Wendall and Janet Mills in which Mountain Camo sold the Mills a number of items.
How will my workplace or community be made better : Examples of such persons might be your apartment community manager, the director of base housing where you are stationed.
The time value of money : Why should we (managers) learn calculations involving the time value of money? What kind of management decisions does it help us make?
Stock''s expected price years from today : The dividend is projected to increase at a constant rate of 7.9% per year. The required rate of return on the stock is 12%.
Define the negligent failure : Donald Josue Jr. was rendered paraplegic as a result of a single-vehicle accident in which he was ejected from the bed of an Isuzu pickup truck.
How conscious and sensitive are characters regarding gender : How conscious and sensitive are characters regarding gender prejudice, power inequality, and subordination? Did they take inequality of the sexes for granted?
What does literature offer an individual : How has the importance of reading changed from earlier eras (pre-digital/audio/visual media) to our present day?

Reviews

Write a Review

Risk Management Questions & Answers

  A project report on mutual funds

This project report speaks of the core and future aspects of Mutual Funds and the present challenges to cope with.

  Evalaute the theoretical option price

Evalaute the theoretical option price

  Risk and return

Investing in the stock market and Risk-free investment and inflation

  Evaluate the gross profit

Evaluate the gross profit

  Discuss concepts of risk and management

Risk lies at all levels of business activity. There are many different kinds of risks within an management as well as ways to manage risks.

  Determine the average risk premium

Here are stock market & Treasury bill percentage (%) returns between 2006 and 2010: Determine the average risk premium

  Hypothetical healthcare organization ratios

Discuss and explain why one should apply caution when using financial ratios for analyzing a healthcare management's current financial position and future viability.

  Discuss role of risk assessment

The financial information has been dominated currently by stories of financial institutions that have mis-measured risk as part of subprime mortgage crisis.

  Calculate maturity risk premium

The real risk-free rate is 3 percent, & inflation is expected to be 3 percent for the next two years. A 2-year Treasury security yields 6.3 percent.

  Selcting best option for portfolio

Suppose you are planning investing in two stocks to form a portfolio. Assume you do not like risk. Which one of given stock combinations will you select for your portfolio?

  Result of systematic or unsystematic risk

It has been a little over one year since the collapse of Lehman Brothers which was the first major event in the downturn of our stock market & economy.

  Determine risk management

Determine risk management? Discuss the importance of risk management in an organization? How does risk management mitigation create value for an organization?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd