Question

33.33 A financial company advertises on television that they will pay you $75,000 now in exchange for annual payments of $12,500 that you are expected to receive for a legal settlement over the next 12 years. You estimate the time value of money at 10 percent. Would you except this offer?

33.32 If a person spends $15 a week on coffee (assume $750 a year), what would be the future value of that amount over 9 years if the funds were deposited in an account earning 1 percent? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

33.31If a person spends $15 a week on coffee (assume $750 a year), what would be the future value of that amount over 9 years if the funds were deposited in an account earning 1 percent? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

33.30 If you desire to have $25,000 for a down payment for a house in six years, what amount would you need to deposit today? Assume that your money will earn 2 percent. Use Exhibit 1-C. (Round time value factor to 3 decimal places and final answer to the nearest whole number.)

33.29 b (b) The future value of $800 saved each year for 10 years at 7 percent. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) c.The amount a person would have to deposit today (present value) at an interest rate of 7 percent to have $800 five years from now. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) d.(d) The amount a person would have to deposit today to be able to take out $600 a year for 8 years from an account earning 8 percent. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

33.28.What would be the yearly earnings for a person with $9,000 in savings at an annual interest rate of 2.5 percent? 27.A family spends $50,000 a year for living expenses. If prices increase by 6 percent a year for the next three years, what amount will the family need for their living expenses after three years? Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the nearest whole number.)

33.26. a(a) If the value of land in an area is increasing 5 percent a year, how long will it take for property values to double? (Round your answer to 1 decimal place.) b.b) If you earn 10 percent on your investments, how long will it take for your money to double? (Round your answer to 1 decimal place.) c.(c) At an annual interest rate of 4 percent, how long will it take for your savings to double? (Round your answer to 1 decimal place.)

33.25. Ben Collins plans to buy a house for $255,000. If that real estate is expected to increase in value by 5 percent each year, what will its approximate value be seven years from now? Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the nearest whole number.)

33.24. Financial intermediaries’ main goal is to: a.Encourage users to borrow less. b Encourage providers to save less. c. Provide funds at an interest rate substantially above the market rate. d. Provide funds at an interest rate substantially below the market rate. e. Charge an amount that will pay them to operate and charge an adequate interest rate.

I have answered almost all of these but it keeps saying my answer is wrong. I just want to check my work. I cant afford to get any more wrong. Please help me.

Answer 1

33.33

We shall use financial calculator for the same:

N	12
I/Y	10.0000%
FV	-
PMT	$         12,500.00
CPT PV	$         85,171.15

Since this amount is larger than $75,000 hence one shall not choose the offer

for 33.32 and 33.31 kindly specify either the exhibit as mentioned or the frequency of compounding

33.30

N	6
I/Y	2.0000%
FV	25,000.00
PMT	$                        -
CPT PV	$         22,199.28

33.29 b)

N	10
I/Y	7.0000%
PV	-
PMT	$              800.00
CPT FV	$        11,053.16