What is the present value of the combined cash flows

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Q1. You invest $1,700 in a 6-year certificate of deposit (CD) that pays 2.5% interest, compounded annually. How much money will you have when the CD matures?

Q2. The annual interest rate is 4%. What is the present value (PV) of $1,000 that you'll receive in 18 years?

Q3. You have $4,000 in your savings account, and want to buy a car for $30,000. If you want to buy the car in 10 years, what annual interest rate would you need to earn?

Q4. Your annoying neighbors always boast that their home doubled in value in 11 years. If their claim is true, what annual return does it imply?

Q5. You have $3,000 in your savings account, and want to buy a car for $25,000. If you are not depositing any new money into your account and the interest rate on your savings account is 7% per year, how many years do you have to wait before you can buy the car?

Q6. You expect to receive two cash flows: $8,000 paid after 3 years and $16,000 paid after 6 years. The annual interest rate which can be earned over this time is 5%. What is the present value of the combined cash flows?

Reference no: EM133168244

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