Time Benefit of Money Extra Problem Set 1

1 . You are planning to leave the workplace in 20 years. You'll live ten years following retirement. You want to be able to draw out of your savings at the price of \$10, 000 each year. How much would you have to pay in equal twelve-monthly deposits until retirement in order to meet your aims? Assume curiosity remains for 9%. [\$1254] В

2 . You are able to deposit \$4000 per year in an account that pays 12% interest. Should you deposit this sort of amounts for 15 years and start drawing money out from the account in equal gross annual installments, simply how much could you remove each year for 20 years? [\$19964. 12] В

3. What is the value of a \$100 perpetuity if interest is 7%? [\$1428. 57] В

some. You deposit \$13, 000 at the beginning of yearly for ten years. If fascination is being paid out at 8%, how much are you going to have in 10 years? [\$203391. 33] В

5. You are getting obligations of \$8000 at the beginning of annually and they are to last an additional five years. At 6%, what is the significance of this pension? [35720. 84] В

6th. How much would you have to put in today to have \$10, 000 in five years for 6% fascination compounded semiannually? [\$7440. 94] В

several. Construct a great amortization timetable for a 3-year loan of \$20, 500 if interest is 9%. В

almost 8. If you receive payments of \$15, 500 per year for the next ten years and interest is usually 4%, simply how much would that stream of income be worth in present benefit terms? [\$121663. 50] В

being unfaithful. Your company need to deposit similar annual commencing of yr payments in a sinking account for a duty of hundreds of dollars, 000 which usually matures in 15 years. Assuming you can earn 4% curiosity on the settling fund, simply how much must the payments be? [\$38415] В

10. Should you deposit \$45, 000 in an account generating 4% fascination compounded quarterly, how much would you have in 5 years? [\$54908. 55] В

eleven. How much might you pay for a great investment which will be really worth \$16, 500 in 36 months? Assume fascination is 5%. [\$13821] В

doze. You have hundred buck, 000 to get at 4% interest. If you want to withdraw similar annual obligations for 4 years, how much could you withdraw each year and leave \$0 in the expenditure account? [\$27548] В

13. You are thinking about the purchase of two several insurance usually are. Annuity A will pay you \$16, 500 at the beginning of every year for eight years. Premium B can pay you \$12, 000 at the conclusion of each yr for more than a decade. Assuming your money is worth seven percent, and each costs you \$75, 000 today, which do you prefer? [\$102228 and \$95312] В

14. If your company borrows \$300, 1000 at 8% interest and agrees to repay the loan in 10 similar semiannual obligations to include principal plus interest, how much will those repayments be? [\$36897] В

15. You deposit \$17, 000 every year for 10 years at seven percent. Then you earn 9% after that. If you leave the money invested for another five years simply how much will you have in the fifteenth year? [\$361374] Time Worth of Money Extra Problem Established 2

1 ) \$7, 1000 dollars 10 years from today at 7% is worth how much today? installment payments on your \$10, 1000 dollars six years from today at 10% is worth simply how much today? 3. How much might you have to put in the bank today at 5% to accumulate \$1, 000 over the next year? 4. In case you double your dollars in a few years, what interest rate would you earn? 5. In case you triple your cash in a decade, what rate of interest did you earn? 6. If you place \$100 in the market at the end of each year to get 20 years in 10%, how much would you end up having? What if putting the \$100 in at the beginning of every year? 7. If you put \$100 available in the market today by 10%, just how much would you end up getting in two decades? 8. If you borrow \$10, 000 to get a car loan by a 6% simple interest per annum rate, what would be your monthly payment on a 5 year bank loan? 9. Should you borrow \$150, 000 for any house at a 8% simple interest per annum rate pertaining to 30 years, what is the monthly payment? 10. A simple interest per annum rate of 12% exponentially boosted monthly has a effective yield of? 14. A simple interest per annum rate of 12%...

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