Suppose that you have $100 to invest for a period of 5 years at an interest rate of 10% per year. How much will you have accumulated at the end of this time period?
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A: Formulas: Future value = Present value *(1+rate)^years
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Q: annually
A: Formula to calculate r: r = (FV/PV)^1/n - 1
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A: Present Value: It is the current worth of future amount of money at a given pace of return.
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A: N=6 PMT=450 PV=2000 I=? 2000=450/(1+I)+450/(1+I)^2........+450/(1+I)^6
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Suppose that you have $100 to invest for a period of 5 years at an interest rate of 10% per year. How much will you have accumulated at the end of this time period?
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- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?Suppose that you will receive annual payments of $16,500 for a period of 10 years. The first payment will be made 6 years from now. If the interest rate is 7%, what is the present value of this stream of payments?
- Suppose you plan to deposit $1000 into an account next year, and increase the deposit each year by 5%. How how much will you have in the account after 10 years if the account earns an effective annual return of 9.25%?Suppose you wish to have $15,000 in 6 years. Use the present value formula to find how much you should invest now at 5% interest, compounded semiannually in order to have $15,000, 6 years from now. Then calculate the amount of interest.Consider an investment which pays $2,000 at the end of year 1, year 2, and year 3. In year 4, the investment will pay $5,000 and this payment will grow by 4.3% each year forever. If the appropriate interest rate is 7%, what is this investment worth today?
- If you want to receive $1,000 each year for the next three years how much should you invest today? Assume the annual interest rate to be 10%.An investment opportunity requires that you deposit $1000 a year for 5 years. At the end of this time you will receive $500 a year for 10 years. Is this a good deal if the interest rate available on other deposits is 5%?You will receive a cash payment of $6.4 in 4 years. If the relevant interest rate is 16.4%, how much is it worth today? Answer:
- You expect to receive a one-time payment of $1,000 in 10 years and a second payment of $1,500 in 15 years. The annual interest rate is 3%. If you invest the amount that you'll receive in 10 years, how much money will you have in year 15 (including the cash flow in year 15)?An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?If you invest 1000.00 per year for 3 years starting 1 year from now and 1500.00 per year for 5years starting 4 years from now, how much will be the amount at the end of 8 years from now? Use a 12% interest rate per year.