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Time value of money calculations

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The Time Value of Money Calculations Use the provided information to complete these exercises.

1. In five years, what is the future value of $4,000 if the interest rate is 10% and money is compounded monthly? What is the future value if money is compounded semiannually?

2. Carlos has an investment proposal that invites him to invest $1,000 a year for ten years in a hotel and promises to pay him a return of 11% per year. If Carlos agrees, how much will his investment be worth at the end of ten years?

3. What is the maximum amount of money you should pay for an investment today that is projected to yield $8,000 in four years if the market rate of interest is 12% and the money is compounded semiannually? What would be the present value if the money is com- pounded monthly?

4. Edwin is trying to convince you to invest in his restaurant deal and make ten annual payments of $500, with the first payment due today. If the market rate of interest is 6%, how much will this investment be worth at the end of ten years?

Reference no: EM132558840

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