Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
138 views17 pages

Assignment 1 Time Value of Money

This document contains a student's answers to 7 questions regarding calculations of future and present value using time value of money formulas. The student provides the specific values for present value, number of years, interest rate, and future value for each calculation. They show the work and solve for the unknown variable in each question. The final question calculates that with an initial $2,000 contribution earning 9% annual return over 45 years, the future value will be $96,654.57.

Uploaded by

Eissa Naseem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
138 views17 pages

Assignment 1 Time Value of Money

This document contains a student's answers to 7 questions regarding calculations of future and present value using time value of money formulas. The student provides the specific values for present value, number of years, interest rate, and future value for each calculation. They show the work and solve for the unknown variable in each question. The final question calculates that with an initial $2,000 contribution earning 9% annual return over 45 years, the future value will be $96,654.57.

Uploaded by

Eissa Naseem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 17

Name: Ahmed Ba Tahf Student ID:UA

Question 1
For each of the following, compute the future value:

Present value Years Interest rate Future value


$ 1,975 11 13% $7,575.83
$ 6,734 7 9% $12,310.02
$ 81,346 14 12% $397,547.04
$ 192,050 8 6% $306,098.52
Student ID:UA0154 Solve all the questions using the formulas we used during class
Question 2
For each of the following, compute the present value

Present value Years Interest rate Future value


$8,404.32 9 7% $ 15,451
$21,914.85 7 13% $ 51,557
$38,172.72 24 14% $ 886,073
$26,950.37 35 9% $ 550,164
Question 3
Solve for the unknown interest rate in each of the following:

Present value Years Interest rate Future value


$ 181 4 13.18% $ 297
335 18 6.72% 1,080
48,000 19 7.37% 185,382
40,353 25 10.86% 531,618
Question 4
Solve for the unknown number of years in each of the following:

Present value Years Interest rate Future value


$ 560 15.59 6% $ 1,389
810 9.40 9% 1,821
18,400 26.41 11% 289,715
21,500 24.52 13% 430,258
ng:
Question 5
Assume the total cost of a college education will be $320,000 when your child enters co
you earn on your investment to cover the cost of your child’s college education?

Present value Years Interest rate Future value


$ 67,000 18 9.08% $ 320,000
00 when your child enters college in 18 years. You presently have $67,000 to invest. What annual rate of interest must
d’s college education?
te of interest must
Question 6
You’re trying to save to buy a new $120,000 Ferrari. You have $40,000 today that can be investe
be before you have enough to buy the car?

Present value Years Interest rate Future value


$ 40,000 21 5.50% $ 120,000
,000 today that can be invested at your bank. The bank pays 5.5 percent annual interest on its accounts. How long will it
ts. How long will it
Question 7
You have just made your first $2,000 contribution to your individual retirement accoun
account be worth when you retire in 45 years?

Present value Years Interest rate


$ 2,000 45 9.00%
ion to your individual retirement account. Assuming you earn a 9 percent rate of return and make no additional contributions, wh

Future value
$96,654.57
dditional contributions, what will your

You might also like