Present value = $ -10,000
Rate = 4%
Period = 4 years
Future value = Present value * ( 1 + rate)^periods
Future value = $10,000 * ( 1 +0.04)^4
Future value = $10,000 * 1.16986
Future value = $11,698.60
You were just given $10,000 by your grandmother to help pay off your student loans. After...
Your grandmother just gave you $5 comma 000. You'd like to see what it might grow to if you invest it. a. Calculate the future value of $5 comma 000, given that it will be invested for 5 years at an annual interest rate of 6%. b. Recalculate part (a) using a compounding period that is semiannual (every six months). c. Now let's look at what might happen if you can invest the money at an annual rate of 12%...
You receive $20,000 from your grandmother as a graduation gift. You plan to invest this at an annual interest rate of 6.5 percent. How much money will you have 10 years now?
You take out student loans to help pay for your degree at a 5% annual interest rate. Assume the bank expected inflation to average 3% per year. What real interest rate did they expect to earn from your loan? What happens if inflation is actually 5% per year? Who is better off if inflation is higher than expected? What if it is lower than expected? Why?
You receive $20,000 from your grandmother as a graduation gift. You plan to invest this at an annual interest rate of 6.5 percent. How much money will you have 12 years now? Group of answer choices $41,220.63 $35,782.89 $42,581.93 $37,542.75
You estimate that you will owe $45,300 in student loans by the time you graduate. The interest rate is 4.25 percent. If you want to have this debt paid in full within ten years, how much must you pay each month? Your insurance agent is trying to sell you an annuity that costs $230,000 today. By buying this annuity, your agent promises that you will receive payments of $1,225 a month for the next 30 years. What is the rate...
L06-4 Determining an Unknown Number of Periods (Class Activities #5) You want to invest $10,000 today to accumulate $16,000 for graduate school. If you can invest at an interest rate of 10% compounded annually, how many years will it take to accumulate the required amount? Future value Present value ($10,000 ($16,000 i = 10%, n = ?
2. Amortization. Tanner has just begun paying off his student loans of $30,000 which he has decided to pay off over the next 15 years at an annual rate of 5%, compounded monthly, making monthly payments. Use an amortization table and present value tools to advise Tanner on the following: Answer Point Value Points Earned 2.a. What will Tanner's monthly payment be? Work: 2.b. How much of Tanner's first monthly payment will be applied to pay down the principle on...
8. Your grandmother recently surprised you, and gave you $4,000 expressly for the purpose of starting your retirement savings. Her only stipulation is that you have to invest the money now, and not touch any of it for the next 40 years (at which point you plan to retire). What will the value of this account be at the end of the 40 years under each of the following return assumptions (assume annual compounding)? a) 6% per year b) 12%...
8. Your grandmother recently surprised you, and gave you $4,000 expressly for the purpose of starting your retirement savings. Her only stipulation is that you have to invest the money now, and not touch any of it for the next 40 years (at which point you plan to retire). What will the value of this account be at the end of the 40 years under each of the following return assumptions (assume annual compounding)? a) 6% per year b) 12%...
the donar value o s o ng discount rate 8. Your grandmother recently surprised you and gave you $5,000 expressly for the purpose of starting your retirement savings. Her only stipulation is that you must invest the money now, and not touch any of it for the next 40 years (at which point you plan to retire). What will the value of this account be at the end of the 40 years under each of the following return assumptions (assume...