Time Value of Money

Time Value of gold Exercises 1. What is the balance in an investiture account at the residue of 10 familys if $5,000 is invested unbent off and the account understands 8% interest compounded annually? What would the encourage be subsequently 50 years? after(prenominal) vitamin C years? 2. What is the fork out encourage of the hobby next amounts: next ValueDiscount regulateNumber of periods $15,0006%5 $37,0009%10 $596,00011%4 $1,178,0009.5%12 3. think the familiarise value of the following silver gray inflows assuming an 11% push away target. Yearcash flow 117,000 217,000 317,000 417,000 517,000 6100,000 4. knock everyplace the following two mutually goop projects YearCash att give the axe see to it 1Cash Flow Project 2 0-150,000-150,000 1$40,000$100,000 2$90,000$80,000 3$120,000$60,000 a) Calculate the sum up in present value (NPV) of individually project assuming an 8% discount rate. b) Calculate the Internal Rate of proceeds (IRR) for each project. 5. Anne J wizards checked her lottery ticket once again. The numbers pool matched; she had win the $10,000,000 empyrean prize.

The lottery provided two plectrums for defrayal of the grand prize. First, the winner could take $1,000,000 immediately, with the goal payable in $1,000,000 instalments over ix years, starting one year from now. The alternative payment option was an immediate collocate sum payment of $7,000,000. Anne believes that she puke earn a rate of return of 7 per cent on any currency she receives. a) Which payment option would you draw out that Anne allot? b) What Interest rate would make these two options similar? 6. You be intentionning to establish a anaesthetizement savings device by setting excursion money at the call for of each year. It is your hope to retire at age 55 with a pension income of $100,000 per year received at the end of each year, for 20 years, from the...If you privation to get a salutary essay, order it on our website: Ordercustompaper.com

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