Present value = Future value /(1+r)^n | ||||
Where, | ||||
r= rate of interest | ||||
n= number of years | ||||
=$191000/(1+0.11)^8 | ||||
Investment | =$82879.96 | |||
Problem 5-17 Calculating Present Values (LO2) Suppose you are committed to owning a $191,000 Ferrari. If...
Calculating Present Values [LO2] Suppose you are committed to owning a $245,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 11.2 percent and you want to buy the car in 9 years (on the day you turn 30), how much must you invest today?
Suppose you are committed to owning a $175,000 Ferrari. If you believe your mutual fund can achieve an 11.2 percent annual rate of return, and you want to buy the car in 10 years on the day you turn 30, how much must you invest today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Amount to invest
Suppose you are committed to owning a $245,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 11.2 percent and you want to buy the car in 9 years (on the day you turn 30), how much must you invest today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In this part, calculate the present values. Use the Excel PV function to compute the present values. You are committed to owning a $180,000 Ferrari. If you believe your mutual fund can achieve an annual return of 10 percent, and you want to buy the car in 12 years, how much must you invest today? (6 Points) Calculate the present values in the table below using the PV Excel function. (6 Points) Future value Years Interest rate Present value $19,500...
Suppose the government decides to issue a new savings bond that is guaranteed to double in value if you hold it for 22 years. Assume you purchase a bond that costs $100. a. What is the exact rate of return you would earn if you held the bond for 22 years until it doubled in value? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If you purchased the...
Problem 4-25 Calculating Present Values (LO 2] You have decided that you want to be a millionaire when you retire in 44 years. a. If you can earn an annual return of 11.34 percent, how much do you have to invest today? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if you can earn an annual return of 5.67 percent? (Do not round Intermediate calculations and round your answer to 2...
Problem 5-3 Calculating Present Values [LO2] For each of the following, compute the present value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16): 13 4 29 40 7% 13 14 $16,051 57,557 892,073 556,164
Problem 5-3 Calculating Present Values [LO2] For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): Present Value Years Interest Rate Future Value 14 8 % $15,551 5 14 52,557 30 15 887,073 35 8 551,164
Problem 6-20 Calculating Loan Payments (LO2, 4) You want to buy a new sports coupe for $87.500, and the finance office at the dealership has quoted you an APR of 6.9 percent for a 48 month loan to buy the car. a. What will your monthly payments be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the effective annual rate on this loan? (Do not round Intermediate calculations. Enter your...
Problem 5.11 Calculating Present Values (LO2 You have just received notification that you have won the $1 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 71 years from now. What is the present value of your windfall if the appropriate discount rate is 9 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value