Time Value of Money Extra Problem Set 1 1. You are planning to retire in twenty years. You'll live ten years after retirement. You want to be able to draw out of your savings at the rate of $10,000 per year. How much would you have to pay in equal annual deposits until retirement to meet your objectives? Assume interest remains at 9%. [$1254] 2. You can deposit $4000 per year into an account that pays 12% interest. If you deposit such amounts for 15 years and start drawing money out of
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Corporate Finance 1. Time value of money This concept discuss about the future value and the present value of money. For example a dollar today has more value than the dollar you will be earning in the future. Time value of money is a very important concept because it will help make decision on how much to save today to have a certain amount of saving for retirement in future. Interest rate and a time line also plays an important role in analyzing the time value of money. For Individuals the
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invested for 6 years at 5% compounded annually 5-2A. (Compound Value Solving for n) How many years will the following take? a. $550 to grow to $1,043.90 if invested at 6% compounded annually b. $40 to grow to $88.44 if invested at 12% compounded annually c. $110 to grow to $614.79 if invested at 24% compounded annually d. $60 to grow to $73.80 if invested at 3% compounded annually 5-3A. (Compound Value Solving for i) At what annual rate would the following have
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dividend is expected to grow at a constant rate of 5% per year, and investors require a 15 % rate of return on the stock. 1. What is the stock’s value? Stock value does not have a constant value. The value fluctuates based on the number of factors which includes dividends, investment growth, and the conditions of economy and financial markets. The stock value is $21.00. A B $2.00 D0 5% E(g) 15% R(Rs) $21.00 E(P0)= $2.00x 1.05 = $2.10 = $21.00
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BUSINESS 111 FALL 2011 NON-BBA FINAL EXAM REVIEW GUIDE Final Exam Date: FRIDAY, DECEMBER 9TH, 2011 Exam Time for WLU Students: 7:00 p.m. – 9:30 p.m. Exam Time for UW Students: 7:30 p.m. – 10:00 p.m. Writing Locations posted at https://www.wlu.ca/~mibrahim/exams/FALL2011/BUSINESS.html Important Notice: If a student cannot write a business or economics final exam as scheduled, they must submit a "Petition for Exception to Academic Regulations" form to Ms Lee Leeman, Student and
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double AGI’s revenue, increase it’s leverage with contract manufactures and expand its presence with key retailers and distributions. Liedtke is evaluating the company in order to find out whether the future benefits justify or surpass the present value of the investment in Mercury. Analysis: In order for Liedtke to get a broader picture on the acquisition of Mercury, he needs to compare and analyze a list of financial data from 2006 to 2011; projected balance sheet accounts, operating results
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B) financial decisions made by corporations C) financial decisions made by governments D) none of the above Answer: B Type: Easy Page: 3 2. Finance, generally, deals with A) money B) markets C) people D) all of the above Answer: D Type: Easy Page: 3 3. The following are examples of the United States-based corporations except: A) General Motors
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Assignment 2: LASA 1- The Time of Money Rodney Schilling Financial Management February 26, 2014 Professor Charlie Merritt Argosy University Online LASA 1- The Time of Money In this scenario, I will be giving a detailed report on four different financial issues that Mary has asked me to help her resolve before her retirement. Mary has worked for Argosy University for almost 25 years and is looking to retire in the near future and wants to address several financial issues
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TVM TEST BANK: TIME VALUE OF MONEY (Difficulty: E = Easy, M = Medium, and T = Tough) Multiple Choice: Problems Easy: FV of a single payment Answer: d Diff: E [i]. You deposit $2,000 in a savings account that pays 10 percent interest, compounded annually. How much will your account be worth in 15 years? a. $2,030.21 b. $5,000.00 c. $8,091.12 d. $8,354.50 e. $9,020.10 FV of a single payment Answer: c Diff: E [ii]. You deposit $1,000 in
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payments (without considering the time value of money) and forward the mortgage statement to you and the IRS for tax filing purposes. Then you file your tax form according to your income tax rate of 28%. Calculations The following assumptions were made for the calculations of mortgage amortization tables: * the amount of money needed to pay for points is available in your bank account; * Mortgage One Company does not allow you to build the point money into the mortgage; * the amount
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