What annual interest rate would you need

Assignment Help Finance Basics

Reference no: EM133648978

Assignment: Time Value of Money

Answer the following time value of money questions below. Charting out each of the problem elements (ex. N = 10, PV = 500, etc.) will not only help you in answering the questions but will also assist me in following your calculations.

Question A. What is the present value of a 10-year annuity of $400 per year if the annual interest rate is 3.5%?

Question B. What will an investment of $2,500 today be worth in 15 years at an interest rate of 2.5% compounded semi-annually?

Question C. How many years will it take for your investment of $1,000 to become $10,000 at an annual interest rate of 3.9%?

Question D. What annual interest rate would you need in order for your investment of $2,200 to grow to $17,500 in 12 years?

Question E. You are offered an annuity that will pay you $200 per year for each of the next 7 years. You are trying to decide between this investment opportunity and another opportunity where you could earn 5% on your money with an equal amount of risk. What is the most you should pay for this annuity?

Question F. What is the present value of a perpetuity bond that will pay you $70 of interest per year at an interest rate of 6%?

Question G. What is the present value of a 7-year annuity of $175 plus an additional lump sum of $1,000 at the end of year 7 if the interest rate is 5.5%?

Question H. What is the cost of an investment that will produce cash flows of $250 at the end of the next 5 years, then an extra lump sum payment of $500 at the end of the 5th year at an interest rate of 5%?

Question I. How much would you be willing to pay today for an investment that pays the following cash flows at the end of each of the next 4 years if your required rate of return is 9% per year?

Period	Cash Flow
0	$0
1	$100
2	$200
3	$300
4	$400

Reference no: EM133648978

Questions Cloud

Discuss how these two roles would interact-collaborate : Take the time to compare and contrast the two roles that you have chosen and specifically discuss how these two roles would interact, collaborate

Complete all transactions in the general journal forms : Complete all transactions in the General Journal forms provided 2025 Oct 1 Mary invested $27.500 into the new business Jenkins Repair Experts 3 Purchased

How to set healthy boundaries : People have varying levels of sensitivity when it comes to their personal boundaries, as well as how those boundaries transfer to the workplace.

Intervene unaccompanied minors for individual : Explain how the strength-based practices are used to intervene Unaccompanied minors for an individual, family, or group.

What annual interest rate would you need : What annual interest rate would you need in order for your investment of $2,200 to grow to $17,500 in 12 years?

Large number of individuals in the community : A large number of individuals in the community you serve are undocumented agricultural workers, many of whom would benefit from the services

Philosophical relationship to effective teacher preparation : How does this topic link to the College's Conceptual Framework and the framework's philosophical relationship to effective teacher preparation?

Social issues affecting human behavior : How can information from the film be helpful to solve social issues affecting human behavior?

Christian worldview offers hope of restoration : We are convinced that the Christian worldview offers hope of restoration, not only for individuals but also for families,

User Account

All Pages