FINC330

1. To what amount will the following invest accumulate?

$6,262, invested today for 32 years at 7 percent compounded annually..

round 2 decimals

2. You place $1,155 in a savings account today that earns an annual interest rate of 11 percent compounded annually. How much will you have in this account at the end of 29 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?

$454,592 to be received from now, discounted back to the present at 8 percent, compounded annually. round 2 decimals

4. How many years will the following take?

$7,525 to grow to $37,733 if invested at 18 percent compounded annually. round 2 decimals

5. Cooling Tools Inc. is currently producing 994 of small refrigerators per month but the company’s CEO plans to increase production at a rate 11.00 percent per month until the firm is producing5,488 of refrigerators per month. How many months will it take? round 2 decimals

6. Upon graduating from college you make an annual salary of $89,189. You set a goal to double it in the future. If your salary increases at an average rate of 8.39 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?

$9,724 to grow to $51,871 in 30 years

Round the answer to two decimal places in percentage form

8. A firms dividends have grown over the past several years. 7 years ago the firm paid a dividend of $1. Yesterday it paid a dividend of $5. 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?

$10,445 invested today for 32 years at 11.04 percent compounded monthly.

10. You placed $3,544 in a savings account today that earns an annual interest rate of 17.20 percent compounded annually. How much will you have in this account at the end of 13 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 2 years from now. The car will cost $47,673 at that time. Assume that Stephen can earn 6.23 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?

$1,432 every year at the end of the year for 8 years at 9 percent compounded annually… round 2 decimals

13. For the nest 9 years you decide to place $1,253 in equal year end deposits into a savings account earning 5.79 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?

$2,772 every year end of the year for the next 6 years discounted back to the present at 5.64 percent per year compounded annually? round 2 decimals

15. You have accumulated some money for retirement. You are going to withdraw $54,690 every year at the end of the year for the next 20 years. How much money have you accumulated for your retirement? Your account pays you 13.42 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. $822 b. $2,227 c. $1,837 d. $434

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 $2,472 per year at the end of years one through three and $13,634 per year at the end of years four and five. If the appropriate discount rate is 18.18 percent per year what is the present value of this cash flow pattern. round 2 decimals