Alternative Problems and Solutions

| |finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per |

c. If the average new home costs $200,000 today, what will be the value in 10 years if inflation is 4% per year?

a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest?

3.  When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years.  TRUE

1) Establish the principal and interest amount of the monthly payment. Using the 30 year loan principal and interest amount of the payment is $1,150.92

* If we surmise that the company’s specialist’s predictions of 4% on market growth along with renewing current and or adding more customer contracts then the profits should be as follows:

Issue e) What tax benefits would John realize if he invested $15,000 in Jane 's jewelry making?

4. Given that both Joe and Mary Garner are in their mid-30s and want to retire when they reach age 65, what type of investment goals would be most appropriate for them?

Issue e) What tax benefits would John realize if he invested $15,000 in Jane 's jewelry making?

9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?

In question four, Janet was asked to solve a question that deals with annuity payments, specifically, ordinary annuities. It starts by asking of how much you will make if you add $2,000 every year and it is compounded by 10% interest every year. These, for the most part, are future value problems. The first one comes out to be a future value of $12,210.20, which does not satisfy the need for $20,000. The next part asks what the value would be if the interest was compounded semiannually. You have to do an equation in order to find out what the effective annual interest rate. Through this equation you come out with a value of 10.25% and after the calculator calculations you come out with a future value of $12,271.11, also not meeting the demand for that first year of college. The next part asks what payment will you need in order to get to that $20,000 number and the present value comes to be $3,275.95. Next, the case asks what original payment you would need in order

In this specific Case, that has asked the Sale growth for the four-year period, can be calculated ‎as bellow;‎

However, the company expects that its sales will grow 25 percent annually for the next five years. As illustrated in Table 1 the demand after 5 years will be approx.

1. Sales forecast – (at $ 30 retail price with the assumption of $15 whole sale price)

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