What is the present value of investment

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1) What is the present value of ?$700 to be received 10 years from now discounted back to the present at 9 ?percent?

2) Kirk Van? Houten, who has been married for 22 ?years, would like to buy his wife an expensive diamond ring with a platinum setting on their? 30-year wedding anniversary. Assume that the cost of the ring will be ?$10,500 in 8 years. Kirk currently has ?$4,545 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the? ring?

3) You are considering investing in a security that will pay you ?$1,000 in 25 years.

a. If the appropriate discount rate is 11 percent?, what is the present value of this? investment?

b. Assume these investments sell for ?$243 in return for which you receive ?$1,000 in 25 years. What is the rate of return investors earn on this investment if they buy it for ?$243??

4) Jack asked Jill to marry? him, and she has accepted under one? condition: Jack must buy her a new ?$320,000 ?Rolls-Royce Phantom. Jack currently has ?$28,780 that he may invest. He has found a mutual fund with an expected annual return of 7 percent in which he will place the money. How long will it take Jack to win? Jill's hand in? marriage? Ignore taxes and inflation.

a. The number of years it will take for Jack to win? Jill's hand in marriage is X years. ? (Round to one decimal? place.)

5) You lend a friend ?$10,000?, for which your friend will repay you ?$27,027 at the end of 5 years. What interest rate are you charging your? "friend"? ?(Round to the nearest whole? percent.)

Reference no: EM132951488

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