FINC330
garin1
finc330_week_2_homework.docx2. You place $590 in a savings account today that earns an annual interest rate of 15 percent compounded annually. How much will you have in this account at the end of 19 years? Assume that at all interest at the end of the year is reinvested the next year. round 2 decimals
3. What is the present value of the following future amount?
$61,579 to be received from now, discounted back to the present at 4 percent, compounded annually. round 2 decimals
4. How many years will the following take?
$9,412 to grow to $87,027 if invested at 18 percent compounded annually. round 2 decimals
6. Upon graduating from college you make an annual salary of $78,573. You set a goal to double it in the future. If your salary increases at an average rate of 4.33 percent how long will it take to reach your goal? round 2 decimals
7. At what annual rate would the following have to be invested?
$1,172 to grow to $50,797 in 4 years
Round the answer to two decimal places in percentage firm..
8. A firms dividends have grown over the past several years. 3 years ago the firm paid a dividend of $2. Yesterday it paid a dividend of $4. What was the average annual growth rate of dividends for this firm?
Round the answer to two decimal places in percentage firm..
9. To what amount will the following investment accumulate?
$17,578 invested today for 22 years at 7.42 percent compounded monthly.
10. You placed $8,195 in a savings account today that earns an annual interest rate of 11.41 percent compounded annually. How much will you have in this account at the end of 29 years? Assume that all interest received at the end of the period is reinvested the next period. round 2 decimals
11. Stephen plans to purchase a car 4 years from now. The car will cost $60,998 at that time. Assume that Stephen can earn 5.12 percent (compound monthly) on his money. How much should he set aside for the purchase? round 2 decimals
12. What is the accumulated sum of the following stream of payments?
$2,005 every year at the end of the year for 13 years at 10 percent compounded annually… round 2 decimals
13. For the nest 10 years you decide to place $4,615 in equal year end deposits into a savings account earning 7.08 percent per year. How much money will be in the account at the end of the time period? round 2 decimals
14. What is the present value of the following annuity?
$2,687 every year end of the year for the next 5 years discounted back to the present at 13.44 percent per year compounded annually? round 2 decimals
15. You have accumulated some money for retirement. You are going to withdraw $60,812 every year at the end of the year for the next 19 years. How much money have you accumulated for your retirement? Your account pays you 18.01 percent per year compounded annually. To answer each question you have to find the present value of these cash flows. round 2 decimals
16. You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 3.65 percent compounded annually. How much is this investment worth today?
a. $1,677 b. $2,999 c. $4,086 d. $1,064
What is the present value of this investment if 3.65 percent per year is the appropriate discount rate? round 2 decimals
17. You have been offered an opportunity to invest in a project that will pay $2,711 per year at the end of years one through three and $13,734 per year at the end of years four and five. If the appropriate discount rate is 7.89 percent per year what is the present value of this cash flow pattern. round 2 decimals
