If you deposit $10,000 in a bank account that pays 10 percent interest annually, how much
money will be in your account after 5 years?
What is the present value of a security that promises to pay you $5,000 in 20 years? Assume
that you can earn 7 percent if you were to invest in other securities of equal risk.
If you deposit money today into an account that pays 6.5 percent interest, how long will it take
for you to double your money?
John Roberts has $42,180.53 in a brokerage account, and he plans to contribute an additional
$5,000 to the account at the end of every year. The brokerage account has an expected annual
return of 12 percent. If John’s goal is to accumulate $250,000 in the account, how many years
will it take for John to reach his goal?
Your parents are planning to retire in 18 years. They currently have $250,000, and they would
like to have $1,000,000 when they retire. What annual rate of interest would they have to earn
on their $250,000 in order to reach their goal, assuming they save no more money?
What is the future value of a 5-year ordinary annuity that promises to pay you $300 each year?
The rate of interest is 7 percent.
What is the future value of a 5-year annuity due that promises to pay you $300 each year? Assume
that all payments are reinvested at 7 percent a year, until Year 5.
Time Value Analysis?
05
May
ZORCH
May 5, 2010 at 12:40 am
Homework, I’ll bet.
BigBen
May 5, 2010 at 1:04 am
It is all about time valued formula:
P = A (1+i)^n
P = The amount of money by end of n years and i interest rate
A = Initial investment
i = interest rates. If it is 3%, put it as 0.03
n = number of years the investment take place