Time Value of Money and Correct Answer

For Investment A: (40 – 25)/ 10= 1.5 standard units= close to 94% to get the 40 million in return

academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,

Billy would still deposit $6 a week and about $24 a month. With the interest included, Billy would’ve saved about $2,020.49 in seven years, however this is risky because he could possibly lose a lot of money while investing in stocks.

Georgia Braxton has a take-home pay of $600 a week. With disability insurance coverage that replaced 70 percent of her earnings, what amount would she receive per week after the waiting period?

How much would you pay for a security that pays you $500 every 4 months for the next 10 years if you require a return of 8% per year compounded monthly?

1. A $120,000, 5%, 200-day note dated June 6 is discounted on October 8. The discount period is:

15. The condominium at the beach that you want to buy costs $249,500. You plan to make a cash down payment of 20 percent and finance the balance over 10 years at 6.75 percent. What will be the amount of your monthly mortgage payment?

A firm has an expected dividend next year of $1.20 per share, a zero growth rate

a. Starting with $20,000, how much will you have in 20 years if you can earn 5% on your money?

What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?

9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if

10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?

2. If you had a payment that was due you in 5 years for $50,000 and you could earn a 5% rate of return, how much

The interest rate of a term deposit is at 5.2% per annum. Available investment fund is $200,000. Term Deposit will yield $10,400 p.a. by using $200,000 multiply by 5.2%. However, for compounded interest rate, 5 years investment will be $257,697 (ROI = $57,697). And 10 years investment will be $332,038 (ROI = $132,038), assume that the interest rate is constant within 10 years period. The risk is considered minimal.

1. Assume that at retirement you have accumulated $825,000 in a variable annuity contract. The assumed investment return is 5.5% and your life expectancy is 18 years. What is the hypothetical constant benefit payment?