TeamFinancial Questions

You must show the work to get full credit in each question. 

Assigned problems:

Problem 4-1  Future Value of a Single Payment

If you deposit $14,000 in a bank account that pays 3.7% interest annually, how much would be in your account after 5 years? Round your answer to the nearest cent.

Problem 4-2  Present Value of a Single Payment

What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 4.6% annually? Round your answer to the nearest cent.

Problem 4-3  Interest Rate on a Single Payment

Your parents will retire in 15 years. They currently have $260,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.

Problem 4-4  Number of Periods of a Single Payment

If you deposit money today in an account that pays 8.1% annual interest, how long will it take to double your money? Round your answer to the nearest whole number.

Problem 4-5  Number of Periods of an Annuity

You have $51,926.35 in a brokerage account, and you plan to deposit an additional $5,500 at the end of every future year until your account totals $325,000. You expect to earn 7.2% annually on the account. How many years will it take to reach your goal? Round your answer to the nearest whole number.

Problem 4-6  Future Value: Ordinary Annuity versus Annuity Due

What is the future value of a 8%, 5-year ordinary annuity that pays $200 each year? Round your answer to the nearest cent.

If this were an annuity due, what would its future value be? Round your answer to the nearest cent.

 

Problem 4-7  Present and Future Value of an Uneven Cash Flow Stream

An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $500 at the end of Year 5, and $700 at the end of Year 6. If other investments of equal risk earn 4% annually, what is its present value? Round your answer to the nearest cent.

What is its future value? Round your answer to the nearest cent.

 

Problem 4-8  Annuity Payment and EAR

You want to buy a car, and a local bank will lend you $25,000. The loan would be fully amortized over 3 years (36 months), and the nominal interest rate would be 12%, with interest paid monthly. What is the monthly loan payment? Round your answer to the nearest cent. 

What is the loan's EFF%? Round your answer to two decimal places.