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    Time Value of Money Problems

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    Karah Johnson
    If you deposit $15,000 today earning 8% annual interest, the future value will be $29,985.07 in 9 years. A graduation gift of $10,000 received in 3 years is worth $8,162.98 today if discounted at 7%. The present value of a 20-year $30,000 ordinary annuity with a 6% discount rate is $344,097.64. It will take 9 years to double an initial investment of $5,000 earning 8% annual interest.

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    Time Value of Money Problems

    Uploaded by

    Karah Johnson
    662 views4 pages
    If you deposit $15,000 today earning 8% annual interest, the future value will be $29,985.07 in 9 years. A graduation gift of $10,000 received in 3 years is worth $8,162.98 today if discounted at 7%. The present value of a 20-year $30,000 ordinary annuity with a 6% discount rate is $344,097.64. It will take 9 years to double an initial investment of $5,000 earning 8% annual interest.

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    excel spreadsheet

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    Time Value of Money Problems.xls

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    If you deposit $15,000 today earning 8% annual interest, the future value will be $29,985.07 in 9 years. A graduation gift of $10,000 received in 3 years is worth $8,162.98 today if discounted at 7%. The present value of a 20-year $30,000 ordinary annuity with a 6% discount rate is $344,097.64. It will take 9 years to double an initial investment of $5,000 earning 8% annual interest.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    662 views4 pages

    Time Value of Money Problems

    Uploaded by

    Karah Johnson
    If you deposit $15,000 today earning 8% annual interest, the future value will be $29,985.07 in 9 years. A graduation gift of $10,000 received in 3 years is worth $8,162.98 today if discounted at 7%. The present value of a 20-year $30,000 ordinary annuity with a 6% discount rate is $344,097.64. It will take 9 years to double an initial investment of $5,000 earning 8% annual interest.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    of 4

    Problem Assignment: Time Value of Money FUTURE VALUE 1

    If you deposit $15,000 today and earn 8% annual interest, how much will you have Answer: $29,985.07

    Using the formula for Future Value FV= PV (1+rt) I determined the following: Present Value Rate Number of Periods Future Value PRESENT VALUE 2 PV r n FV -15000 8.00% 9 $29,985.07

    Tiffany will receive a graduation gift of $10,000 from her parents in 3 years. If the d is 7%, what is this gift worth today? Answer: $8,162.98 FV r n PV -10000 7.00% 3 $8,162.98

    Future Value Rate Number of Periods Present Value

    PV OF AN ANNUITY 3 What is the present value of a 20-year ordinary annuity of $30,000 using a 6% disc Answer: $344,097.64 Payment Per Period Rate Number of Periods Present Value Annuity NPER FUNCTION 4 PMT r n PVA -30000 6.00% 20 $344,097.64

    You deposit $5,000 in an account that pays 8% interest per annum. How long will i Answer: 9 years PV r PMT FV NPER -5,000 8.00% 0 $10,000.00 9.00646834

    Present Value Rate Payment Per Period Future Value

    The Johnsons have $60,000 to use as a down-payment on a house, and they wan from the bank. The current mortgage interest rate is 5%. If they make equal month how much will the monthly payment be? Answer: $1,288.37 PV r NPER PMT -$240,000.00 0.42% 360 $1,288.37

    Tim paid $250 per month into his 401K retirement plan. After 30 years, he had acc average annual rate of interest had he earned over the 30 years? Answer: 9.42% PMT PV n FV r -$250.00 0 360 $500,000.00 9%

    Payment Present Value Number of Periods Future Value Rate 7

    Charlotte's firm had sales of $525,000 in the year 2001. By 2012, sales had increa the average annual rate of increase? Answer: 7.80%

    Alan had saved up $500,000. How much more must he save each year over the ne total of $2 million? Alan earns 5% interest, compounded annually. Answer: $94,257

    interest, how much will you have in 9 years?

    m her parents in 3 years. If the discount rate

    nuity of $30,000 using a 6% discount rate?

    erest per annum. How long will it take to double your money?

    yment on a house, and they want to borrow $240,000 is 5%. If they make equal monthly payments for 30 years,

    plan. After 30 years, he had accumulated $500,000. What r the 30 years?

    2001. By 2012, sales had increased to $1,200,000. What was

    st he save each year over the next 10 years in order to have a unded annually.

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