# Finance help please - 77383

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## abidaprveen

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• Due on: Sat 20 Jun, 2015 (06:00am)
• Asked on: Fri 19 Jun, 2015
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Easy Problem  1-85-2PROBLEMS FUTURE VALUE if you deposit \$10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years?PRESENT VALUE What is the present value of a security that will pay \$5,000 in 20 years if securities of equal risk pay 7% annually?5-3 FINDING THE REQUIRED INTEREST RATE Your parents will retire in 18 years. They currently have \$250,000, and they think they will need \$1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?5-4 TIME FOR A LUMP SUM TO DOUBLE If you deposit money today in an account that pays 6.5% annual interest, how long will it take to double your money?5-5 TIME TO REACH A FINANCIAL GOAL You have \$42,180.53 in a brokerage account, and you plan to deposit an additional \$5,000 at the end of every future year until your account totals \$250,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal?5-6 FUTURE VALUE: ANNUITY VERSUS ANNUITY DUE What's the future value of a 7%, 5-year ordinary annuity that pays \$300 each year? If this was an annuity due, what would its future value be?5-7 PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay \$100 at the end of each of the next 3 years, \$200 at the end of Year 4, \$300 at the end of Year 5, and \$500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Its future value?5-8 LOAN AMORTIZATION AND EAR You want to buy a car, and a local bank will lend you \$20,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 12% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR?5-9 Problems PRESENT AND FUTURE VALUES FOR DIFFERENT PERIODS Find the following values using 9-26 the equations and then a financial calculator. Compounding/discounting occurs annually. a. An initial \$500 compounded for 1 year at 6% b. An initial \$500 compounded for 2 years at 6% c. The present value of \$500 due in 1 year at a discount rate of 6% d. The present value of \$500 due in 2 years at a discount rate of 6% 5-10 PRESENT AND FUTURE VALUES FOR DIFFERENT INTEREST RATES I Ind the following values. Compounding/discounting occurs annually. a. An initial \$500 compounded for 10 years at 6% b. An initial \$500 compounded for 10 years at 12% c. The present value of \$500 due in 10 years at 6% d. The present value of \$1,552.90 due in 10 years at 12% and at 6% e. Define present value and illustrate it using a time line with data from Part d. How are present values affected by interest rates? 5-11 GROWTH RATES Shalit Corporation's 2011 sales were \$12 million. Its 2006 sales were million. a. At what rate have sales been growing? b. Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years; so dividing 100% by 5, we find the growth rate to be 20% per year." Is that statement correct? 5-12 EFFECTIVE RATE OF INTEREST Find the interest rates earned on each of the following: a. You borrow \$700 and promise to pay back \$749 at the end of 1 year. b. You lend \$700 and the borrower promises to pay you \$749 at the end of 1 year. c. You borrow \$85,000 and promise to pay back \$201,229 at the end of 10 years. d. You borrow \$9,000 and promise to make payments of \$2,684.80 at the end of each year for 5 years. 5-13 TIME FOR A LUMP SUM TO DOUBLE How long will it take \$200 to double if it earns the
3 Solution for Finance help please
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Finance compound interest
\$1.00 Genius_1512 1 time(s)
Finance Compound Interest Solutions
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