Homework Answers
we need to find the present value of 30K for first 2 years and 15k for years 3 through 5 at the rate of interest 3%.
we will use the formulas of annuity and annuity table
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Time value of Money 4 Quiz 1 BGMU is buying software that controls pumps and systems...
Question 1. There are 3 sub-questions in the calculation with time value of money, please write...
Question 1. There are 3 sub-questions in the calculation with time value of money, please write down your answers on corresponding blank positions (Totally 15 marks). A magazine provides two subscription options. You can pay $240 now for the next five years, or you can make an annual payment of $65 at the end of each year. If you can invest the money at an interest rate of 10% over the next five years, which option should you choose? (1)...
Last 4 digits of CUNYFirst ID BUS 121 - - Name Time Value of Money: Problem...
Last 4 digits of CUNYFirst ID BUS 121 - - Name Time Value of Money: Problem Set la Tips: • For now, ignore "payment" and "mode" in the TVM calculator app. Problems: 1. Shirin needs to borrow $3.000 and is considering her options. Her bank is offering to lend her the money for 2 van after which she will need to make a single payment to the bank in the amount of $3,500. Her cousin offered to lend her money,...
Ch 05: Assignment Time Value of Money Back to Assignment Attempts: Average:/4 3. Present value Finding...
Ch 05: Assignment Time Value of Money Back to Assignment Attempts: Average:/4 3. Present value Finding a present value is the reverse of finding a future value is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future Which of the following investments that pay will $10,500 in 13 years will have a lower price today? The security that earns an interest rate of 14.50%. The security...
Time Value of Money Keenan has won the lottery for $10,000,000. He is offered a cash...
Time Value of Money Keenan has won the lottery for $10,000,000. He is offered a cash payment now of $7,500,000, or 10 annual payments of $1,000,000. _____________ What is the interest rate that makes these two amounts equal? _____________ If you can invest at 8% how much would you have after 10 years if you invested the $7,500,000? You want a new car that costs $32,000. Figure out the following: ______________ What would the monthly payment be if you borrowed...
Future Value and Present Worth (DRAW the Cash Flow Diagram) a) MARTA is buying a new...
Future Value and Present Worth (DRAW the Cash Flow Diagram)
a) MARTA is buying a new ticketing system. The price the vendor
and MARTA has agreed to is $200,000. The city will also pay 8%
interest compounded annually for the ability to not make any
payment on the system until the 5 year warranty period is up. So,
the agency is going to install the new system in December 2018 but
they do not have to pay the vendor until...
Question 4: Application of Time Value of Money to Mortgages (30 marks) Shanna wants to buy...
Question 4: Application of Time Value of Money to Mortgages (30 marks) Shanna wants to buy a house costing $325,000 and has obtained a loan from TD Bank. A minimum down payment of 15% would be required and the bank will provide the difference. Her grandparent have told her that they will cover her down payment. a. TD Bank has quoted her mortgage interest rate is 4.5%; this rate would be compounded semi- annually, while her payments would be made...
Assignment (Time Value of Money) 1. What is the selling price today of a bond with...
Assignment (Time Value of Money) 1. What is the selling price today of a bond with a face value of $100,000,4% coupon paid annually and maturity of 10 years if market interest rates are: b. 6% c. 2% 2. In exchange for a $20,000 payment today, a well-known company will allow you to choose one of the alternatives shown in the following table, your opportunity cost is 11% Alternative Single Amount $28,000 at the end of 3 years $54,000 at...
5. (10 points) As the price of gasoline goes up, people are willing to drive farther to fill their tank in order to save money. Assume you had been buying gasoline for $2.40 per gallon and that i...
5. (10 points) As the price of gasoline goes up, people are willing to drive farther to fill their tank in order to save money. Assume you had been buying gasoline for $2.40 per gallon and that it went up to $2.83 per gallon at the station where you usually go. If you drive an F-150 pickup that gets 25 miles per gallon, what is the round-trip distance you can drive to break even if it will take 16 gallons...
Solve it by using DecisionTools software When you purchase a car, you may consider buying a...
Solve it by using DecisionTools software
When you purchase a car, you may consider buying a brand-new car or a used one. A fundamental trade-offin this case is whether you pay repair bills (uncertain at the time you buy the car) or make loan payments that are certain. Consider two cars, a new one that costs $15,000 and a used one with 75,000 miles for $5,500. Let us assume that your current car's value and your available cash amount to...
Question 1. There are 3 sub-questions in the calculation with time value of money, please write down your answers on corresponding blank positions (Totally 15 marks). A magazine provides two subscription options. You can pay $240 now for the next five years, or you can make an annual payment of $65 at the end of each year. If you can invest the money at an interest rate of 10% over the next five years, which option should you choose? (1)...
Last 4 digits of CUNYFirst ID BUS 121 - - Name Time Value of Money: Problem Set la Tips: • For now, ignore "payment" and "mode" in the TVM calculator app. Problems: 1. Shirin needs to borrow $3.000 and is considering her options. Her bank is offering to lend her the money for 2 van after which she will need to make a single payment to the bank in the amount of $3,500. Her cousin offered to lend her money,...
Ch 05: Assignment Time Value of Money Back to Assignment Attempts: Average:/4 3. Present value Finding a present value is the reverse of finding a future value is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future Which of the following investments that pay will $10,500 in 13 years will have a lower price today? The security that earns an interest rate of 14.50%. The security...
Future Value and Present Worth (DRAW the Cash Flow Diagram)
a) MARTA is buying a new ticketing system. The price the vendor
and MARTA has agreed to is $200,000. The city will also pay 8%
interest compounded annually for the ability to not make any
payment on the system until the 5 year warranty period is up. So,
the agency is going to install the new system in December 2018 but
they do not have to pay the vendor until...
Question 4: Application of Time Value of Money to Mortgages (30 marks) Shanna wants to buy a house costing $325,000 and has obtained a loan from TD Bank. A minimum down payment of 15% would be required and the bank will provide the difference. Her grandparent have told her that they will cover her down payment. a. TD Bank has quoted her mortgage interest rate is 4.5%; this rate would be compounded semi- annually, while her payments would be made...
Assignment (Time Value of Money) 1. What is the selling price today of a bond with a face value of $100,000,4% coupon paid annually and maturity of 10 years if market interest rates are: b. 6% c. 2% 2. In exchange for a $20,000 payment today, a well-known company will allow you to choose one of the alternatives shown in the following table, your opportunity cost is 11% Alternative Single Amount $28,000 at the end of 3 years $54,000 at...
5. (10 points) As the price of gasoline goes up, people are willing to drive farther to fill their tank in order to save money. Assume you had been buying gasoline for $2.40 per gallon and that it went up to $2.83 per gallon at the station where you usually go. If you drive an F-150 pickup that gets 25 miles per gallon, what is the round-trip distance you can drive to break even if it will take 16 gallons...
Solve it by using DecisionTools software
When you purchase a car, you may consider buying a brand-new car or a used one. A fundamental trade-offin this case is whether you pay repair bills (uncertain at the time you buy the car) or make loan payments that are certain. Consider two cars, a new one that costs $15,000 and a used one with 75,000 miles for $5,500. Let us assume that your current car's value and your available cash amount to...
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