Question

AGEC 217 Dr. Menzies Homework #3 Hannah Jones Show work for any partial credit. 1) What is the future value of $25,000 invested today at 8% compounded monthly for 4 years? FV=PV*(1+i)" = 2900 D (1.0047) "2.4 14X12 FV = 25000 (17.08.)***2 = 1439 1.65 30 2) What is the present value of $400,000 you save for retirement 30 years from now if you discount it at 5%? FV=PV/14 ėjn PV = 400 DO DO (17.05) PV=92950.98 3) What is the monthly payment on a new house that you borrow $250,000 for and pay 4% interest? 400.000 = PV (17.05) 4) How long will it take your money to triple if you receive 10% return on your money, compounded annually? 5) If your money doubled in 7 years, what was the interest rate you received if compounded annually? 6) If you had two investment opportunities, A-8% compounded annually or B-8.25% simple interest, which would you choose over a ten-year horizon?

Answer 1

ya feduse valve (FV) = p.v (14 818 E-v - Qқоюo (1 + o-os 212x9. = qГооо( 1. bo62) (2 1234 Pr>РЯwЈел од 3) Димоя дозе ba@lusu h-norov Солроцлаа periods pee year. 4341-6S 8 - t-time in year. 2) Fov Presenet value = (1 +7ји 400 боо as so.9%, °/. 30 (1+0.25) с 2 SOOOO. 3. principle ancocent - QS Oooo - ДОК3339 12 23. 39 osu poz 4Ром 8, Рgn Ppte Самоал- Мари49 тиіяем a, So, ooo x 46 12 ЪХ Коли рамел $ 21,6%6.66 * Assumed that the toon should be expayed in one year 4 - а ш 4kе млад молзеd = X, dlол охол оо орсоue 4gpple 4 Fu= Р.v (1+0 )МЕ: -> Х Х (1+0) => 3= (+ ot . applying Logo "Log on both sides = 09 (3) = + mg (1+0+) we have t

t= logy – 11:53 log (3) 104 с.1) No7 8 цооg Acukoл - . 11.53 sorento= 11 years and snowtus, s) ta, WAcikg wood invested = 2х, х. At when it became doubled ot. we lewe Frv = pv (1+/) 7. 2x = x (+ 1% ) 7. (48) 2 = (1+1) ? 2 - 2 - (+7) ? 1+3. » 2 = => Г-104. 04 = (+%. =58 = 11040q —) =) та • 10 404 И • 10. , = X Code 0 10 80= (o Jo - .

- О, 6) од , сумля хоол 4 асосс- ht, 3. «№10 [ X10 и | Акои од роя салолло Халолло , A6+29 Abv.9 10 чері 5 Ev =p:(+ 1 ) - м (4 $oros ) = a(1008 1 уго" += (о чая. Ғ0 =, а 15%Я с /,

2. В'S , С» pog ѕСлллл 5, своя 10 900 Я, TOVE P (+84) FAW = (1 (0» 0 )) five а ((+, 625) Е •V = | 25 г. t= to yea 3 - я И. Hege, legeely kaluge o o So As Agallo_4 4олл tu (лле усия в $Ишла B, оолл имеело Schoлe A can poods оде ееlugu » 10 y@g los” зои дом 0-р аl@d ko geree - So I will choose scheine A'.