User Account

All Pages

Time value of multiple cash flow assignment

Assignment Help Finance Basics
Reference no: EM133116713

Time Value of Multiple Cash Flow Assignment

1. An investor wants to save for retirement in 40 years. She evaluates two plans:

Plan 1: Invest $6,000 per year for 40 years.

Plan 2: Wait 10 years and then invest $9,000 per year for 30 years.

If the rate of return is 5% per year, which plan will give her the most for retirement? How much will she have?

2. A home buyer takes out a mortgage for $180,000 to purchase a home. The mortgage rate is 4% per year for 30 years and he will make monthly payments. How much will the monthly payment be? Over the life of the loan, how much in interest doe he pay?

3. A home buyer decides she can afford a monthly mortgage payment of $1,500 per month and decides to take out a 15-year mortgage. The mortgage rate is 3.25%. What is the maximum mortgage amount?

4. You are wanting to drive a new car. The dealership offers you a lease payment for the car of $429 per month for a 36-month lease. The lease agreement states the interest rate on the lease is 6.5% and the first payment is made when you drive the car off the lot. What would the equivalent loan amount for the lease be?

5. You believe that if you retired today, you would need a portfolio value of $1,500,000. However, you plan to retire in 35 years and you think the cost of living (living expenses) will increase by 3% per year.

a.) What is the portfolio value needed in 35 years if you want to retire at the same standard of living?

b.) Based on the amount in part a, how much do you have to invest annually at a rate of 7% to reach your retirement goal?

6. An investment will pay you $50,000 per year for a period of 25 years and the required rate of return is 3%. What is the value of the investment if the first payment occurs 20 years from today?

7. An investor has savings of $100,000 in an account and will add $10,000 per year to an account that earn 6% annually. How many years will it take for the account to reach $2,000,000?

8. Your company offers a retirement savings plan. Each month, $600 is added to your account. After 20 years, the account is worth $325,000. What annual rate of return did you earn?

Reference no: EM133116713

Questions Cloud

How long will it take to bring your credit card balance : The annual percentage rate (APR) on your credit card is 17.8% (monthly compounded). During the first week of school, you racked up $500 in credit card debt. You
How budgets facilitate planning and coordination : 1. Explain how budgets facilitate planning and coordination. 2. Anticipate possible human relations problems caused by budgets
Different types of financial investments : Answer the following questions1. Compare and contrast the different types of financial investments.
Price before and after the dividend payment date : What should happen to the share price before and after the dividend payment date? Substantiate the answer
Time value of multiple cash flow assignment : 1. An investor wants to save for retirement in 40 years. She evaluates two plans:
Identify ways a very small business : Identify ways a very small business, like a single employee mortgage broker, could implement sustainability principles and practice
What is her reconciled balance : A deposit of $215 had been credited on the bank statement but not recorded in the check register. What is her reconciled balance
How much is its margin of safety ratio : Bramble Corp. Equipment has actual sales of $1000000 and a break-even point of $540000. How much is its margin of safety ratio
Pricing risk and derive the capm equation : The CAPM states that only market risk should be priced. Explain to someone who is not an expert in finance why only market risk should be considered when pricin

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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