Reference no: EM132952944

You have savings amounting to $1,500 and you expect to save an...

1. You have savings amounting to $1,500 and you expect to save an additional $800 next year. You need your savings to pay for your tuition fees of $800 in 2 years and $1,000 in 3 years. What is the value of this cash flow today if your savings will earn 6%?
2. Your professor has taken $350,000 and put it into an account earning 8% annually. She plans to withdraw $3,500 a month and travel all over the world until the money runs out. How many years will it be before you see her again?
3. Your parents decide to give you $12,000 towards the down payment of your dream car. The car that you have chosen costs $40,000 (TTL). Your friendly banker approves your loan at 6 years, 12%. What is your monthly payment?
4. If there are 40 more years before you'll retire and you start saving $100 per month, how much will you have when you retire if money is worth 6% in your savings account?
5. If money is worth 8% compounded semi-annually, would it be to your advantage to pay off a current debt of $8,000 by paying the $8,000 now or $12,000 in 4 years?
6. If a car dealer quotes you 14% APR and you are going to make your monthly payments, what is the actual rate (effective rate) that you are paying?
7. What is better, $2,000 received today or $4,000 in 5 years if the discount rate is 14%?
8. You have an investment opportunity that promises to provide the following cash flow for the next 24 years at 8% interest. What is the present value of this cash flow?