1) If you deposit $4,000 today in a bank account and the interest is compounded annually at 10 percent, what will be the value of this investment: a. five years from now? b. ten years from now? c. fifteen years from now? d. twenty years from now? 2) If a business manager deposits $12,000 in a savings account at the end of each year for twenty years, what will be the value of her investment: a. at a compounded rate of 12 percent? b. at a compounded rate of 18 percent? 3) The chief financial officer of a home health agency needs to determine the present value of a $60,000 investment received at the end of year 15. What is the present value if the discount rate is 5%?
Please refer to the formulas in the lesson and on the following website. Pay particular attention to the examples. Scroll to the bottom to review a table with a list of various formula arrangements that may be helpful in completing this assignment.
1) If you deposit $4,000 today in a bank account and the interest is compounded annually at 10 percent, what will be the value of this investment: a. five years from now? b. ten years from now? c. fifteen years from now? d. twenty years from now?
2) If a business manager deposits $12,000 in a savings account at the end of each year for twenty years, what will be the value of her investment: a. at a compounded rate of 12 percent? b. at a compounded rate of 18 percent?
3) The chief financial officer of a home health agency needs to determine the present value of a $60,000 investment received at the end of year 15. What is the present value if the discount rate is 5%?
4) After completing her residency, an obstetrician plans to invest $9,000 per year at the end of each year into a low-risk retirement account. She expects to earn 6 percent for thirty-five years. What will her retirement account be worth at the end of those thirty-five years?
5) Johns Memorial Hospital has just been informed that a private donor is willing to contribute $3 million per year at the beginning of each year for ten years. What is the current dollar value of this contribution if the discount rate is 8 percent?
6) Love Canal General Hospital wants to purchase a new blood analyzing device today. Its local bank is willing to lend it the money to buy the analyzer at a 3 percent monthly rate. The loan payments will start at the end of the month and will be $1,600 per month for the next eighteen months. What is the purchase price of the device?
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