Time Value of Money Assignments

Time Value of Money (TVM) Assignments:
1.

Calculating Interest Rates In 2011, the automobile industry announced the average vehicle selling price in the United States was $28,835. Five years earlier, the average price was $21,608. What was the annual increase in vehicle selling price?

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Enter

5
N

Solve for
2.

I/Y
5.94%

N

Solve for

5.5%
I/Y

80

10%
I/Y

Solve for

$150,000

$40,000
PV

PMT

FV

$1,000,000
PV

PMT

FV

$488.19

Calculating Interest Rates and Future Values In 1895, the first U.S. Open Golf Championship was held. The winner’s prize money was $150. In 2003, the winner’s check was $1,080,000. What was the percentage increase in the winner’s check over this period? If the winner’s prize increases at the same rate, …show more content…

Which of these cash flow streams has the higher present value if the discount rate is five percent? If the discount rate is 22 percent?

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Enter

9
N

5%
I/Y

Solve for

Enter

5
N

Enter

PMT

FV

5%
I/Y

$6,000
PV

PMT

FV

$25,976.86

9
N

22%
I/Y

Solve for

Enter

$4,000
PV

$28,431.29

Solve for

$4,000
PV

PMT

FV

$15,145.14

5
N

22%
I/Y

Solve for
12.

$0

CFj
CFj
CFj
CFj
CFj

$6,000
PV

PMT

FV

$17,181.84

Future Value and Multiple Cash Flows Rasputin, Inc., has identified an investment project with the following cash flows. If the discount rate is 8 percent, what is the future value of these cash flows in Year
4? What is the future value at a discount rate of 11 percent? At 24 percent?
Year
1
2
3
4

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Enter

3
N

8%
I/Y

Cash Flow
$800
900
1,000
1,100
$800
PV

PMT

Solve for

Enter

$1,007.77

2
N

Solve for

FV

8%
I/Y

$900
PV

PMT

FV

$1,049.76

Enter

1
N

8%
I/Y

$1,000
PV

PMT

Solve for
FV = $1,007.77 + 1,049.76 + 1,080.00 + 1,100.00 = $4,237.53

Enter

3
N

11%
I/Y

PV

PMT

2

11%
I/Y

$900
PV

PMT

Solve for

N

11%
I/Y

$1,000
PV

PMT

Solve for
FV = $1,094.10 + 1,108.89+ 1,110 + 1,100.00 = $4,412.99

3
N

24%
I/Y

PV

PMT

N

24%
I/Y

$900
PV

PMT

Solve for

FV

$1,383.84

1
N

24%
I/Y

$1,000
PV

PMT

Solve for
FV = $1,525.30 + 1,383.84 + 1,240.00 + 1,100.00 = $5,249.14
13.

FV

$1,525.30

2

Enter

FV

$1,110.00

$800

Solve for

Enter

FV