You purchase a home for $207,000 that you expect to appreciate 8% in value on an annual basis. How much will the home be worth in ten years?   Factors to use for n=10, I =8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Future Value of $1                                 2.15892 Future Value of an Annuity of $1            14.48656 Present Value of $1                               0.46319 Present Value of an Annuity of $1           6.71008

Q: You are planning to save $1 million for retirement over the next 30 years.(a) If you are earning…

A: Excel Spreadsheet: Excel Workings:

Q: You owe your parents $15,000 (in present day dollars) and want to repay them in equal amounts the…

A: Present value = $ 15,000 Annual interest rate = 10.6% Number of compounding per year = 12 First…

Q: Consider a property that is expected to produce a constant net operating ind year in perpetuity. An…

A: Future Value is calculated by FV function in excel, where PV is current price, NPER is number of…

Q: 1. If money is worth 6% compounded quarterly, find the present value 1.1 of a perpetuity of P50…

A: Note: It is a case where the number of questions asked is more than one and no single question…

Q: Compute the amount of money to be set aside today to ensure a future value of $4,400 in one year if…

A: Present Value of Money to be set aside to receive amount after a specified period (say t) and at a…

Q: You just purchased an annuity that will pay you $24,000 a year for 25 years, starting today. What…

A: Annual payment (P) = $ 24000 Number of annual payments (n) = 25 Interest rate (r) = 8.5%

Q: Instruction: Please calculate the correct amount and show your computation. 1. The future value of…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: You have the opportunity to buy a perpetuity that pays $1,000 annually. Your required rate of return…

A: Payments each year = Cash flow = C = $1000 Rate of Interest = r = 13.2% = 0.132

Q: Your father is about to retire, and he wants to buy an annuity that will provide him with $85,000 of…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: How much must you save each year

A: The worth of today’s dollar at a future date is the future value of the dollar. For example, the…

Q: Answer the following problems. Show your solutions. Annuity 1. How much money will you accumulate by…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Your grandfather has offered you a choice of one of the three following alternatives: $14,000 now;…

A: Net Present value is the difference between present value of cash inflow and present value of cash…

Q: An aunt gifts you with $12,000, but only after you invest it for one year. She gives you two…

A: INTEREST RATE  4.2% 7.1% PERIOD   12 12 PMT  0 1000 PRESENT VALUE $12,000 0

Q: An investor is considering an annuity that pays $40,000 per year for four years.  1. Assuming the…

A: (answer of first 3 parts, please specify if any other part is required) We can compute the present…

Q: find the present value of an annuity due

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: What will be the value in your account at the end of Year 30?

A: Future Value of Annuity: It represents the future worth of the annuity payments made for a given…

Q: You have your choice of two investment accounts. Investment A is a 13-year annuity that features…

A: Given data: For Investment A  Number of years = 13 monthly payment = $1500 interest rate = 7.5%…

Q: YOU WIN $500,000 do you want to be paid out all at once or do you want to receive annual end of year…

A: Calculation of Present Value of Annuity Stream:The present value of annuity stream is…

Q: wants to purchase a house after a couple of years. his target house value is P4,975,193. He decides…

A: Given information : Price of house 4,975,193 Periodic payment (P) 592796 Time period (n) 13…

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: Present value is the current value of a future amount that is to be received or paid out.     Future…

Q: You have just made your first $4,000 contribution to your retirement account. Assume you earn a…

A: given, pv = $4000 r = 11%

Q: much of the value of the account can be attributed to the interest earned? 5)You want have $12,000…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Find the present and future value of $1000 received every month end for 20 years if the interest…

A: Present Value represents the current value of the investment whereas future value represents the…

Q: An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 40 years.…

A: Annuity is the equal stream of cashflow at regular interval of time for a specified period. formula:…

Q: You purchase an annuity that will pay you $100 every three months for five years. The first $100…

A: FORMULA FOR PRESENT VALUE OF ANNUITY (FVA): PVA=A×1-1+rmm×nrm×1+rm where, A=annuity r=rate…

Q: . Present Value If the discount rate is 13 percent, what is the present value of $1,630.47 to be…

A: Part A Future Value = $1,630.47 Time Period = 4 Years Discount Rate = 13% Part  B Present Value =…

Q: How much must you save each year

A: The worth of today’s dollar at a future date is the future value of the dollar. For example, the…

Q: A real estate developer bought land for $170000.00 down and monthly payments of $10550.00 for 10…

A: The loans are paid by monthly equal instalments these carry the payment for the interest and payment…

Q: An item will need replacing in 6 years from now at a cost of P128,000.00. How much should the owner…

A: The worth of money changes with time, therefore the TVM considers the value of money according to…

Q: The Wright family wants to save money to travel the world. They purchase an annuity with a yearly…

A: The annuity value at end of 14 years can be calculated as future value of annuity.

Q: If you put up $37,000 today in exchange for a 6.25 percent, 15-year annuity, what will the annual…

A: Time value of money states that the worth of money in present is always more than that of future…

Q: A man can sell his business for $800,000 cash or for $125,000 plus $12'I a. Find the present value…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Assume that you just inherited an annuity that will pay you $10,000 per year for10 years, with the…

A: When the repeated payments are made at the beginning of a specific period, it is known as annuity…

Q: You just purchased a parcel of land for $40,000. To earn a 9% annual rate of return on your…

A: Future value of a present amount The future value (FV) for a present value (PV) that earns annual…

Q: The average price of a new home is $520,000.If new home prices are increasing at a rate of 10%per…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: C. D. Rom has just given an insurance company $32,500. In return, he will receive an annuity of…

A: D.rom given an insurance company $32500 in return, he will receive an annuity of 3800 for 20 years…

Q: How much will you need to invest annually to reach a savings goal of $300,000 at the end of 25…

A: n=25r=5%FV=300000

Q: Trying to buy a new house. (1) In the case of paying $200,000 in a lump sum plus $1,000 in…

A: To evaluate the given options, we shall first calculate the present value of both and accordingly…

Q: 2. Your aunt invested in a variable insurance product of universal bank. If her annual premium is…

A: The amount that should be invested today can be computed as the present value and The amount that…

Q: What is the monthly payment for a home costing $475,000 with a 20% down payment and the balance…

A: Given: Cost of home = $475000 Down payment = 20% Number of years = 30 Number of months "n" = 30*12 =…

Q: you put up $45,000 today in exchange for a 6.4 percent, 15-year annuity, what will the annual cash…

A: Given information: According to the question,  the present value is $45,000 Rate of interest : 6.4%…

Q: Your grandfather would like to share some of his fortune with you. He offers to give you money under…

A:

Q: To save for a down payment on a home, suppose you decide to invest in an annuity that pays 7.0%…

A: This is the question of annuity. Annuity is the stream of constant cashflow occurring at regular…

Q: You have been told that you need $25,600 today in order to have $100,000 when you retire 35 years…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.