| Corporate Finance FIN3030 |
| Week 1, Assignment 3: Quantitative Exercises and Valuation |
| Part One: Application, Time Value of Money Calculations |
| | 1. Future Value. What is the future value of | | | Answers |
| | a. $572 invested for 5 years at 15 percent compounded annually? |
| | b. $449 invested for 15 years at 14 percent compounded annually? |
| | 2. Present Value. What is the present value of |
| | a. $592 to be received 8 years from now at a 14 percent discount rate? |
| | b. $1167 to be received 7 years from now at a 12 percent discount rate? |
| | 3. Future Value of an Annuity. What is the future value of |
| | a. $1176 a year for 13 years at 13 percent compounded annually? |
| | b. $663 a year for 10 years at 13 percent compounded annually? |
| | 4. Present Value of an Annuity. What is the present value of |
| | a. $387 a year for 5 years at a 9 percent discount rate? |
| | b. $798 a year for 13 years at a 11 percent discount rate? |
| | 7. Annuity. How many years will it take for a payment of |
| | a. $687 to grow to 9,090.91 at a compound rate of 14 percent? |
| | b. $800 from a future value of 10,586.21 at a compound rate of 14 percent? |
| | 14. Mortgage. (Hint: P/Y=12) What is the payoff on a 30 year, 6% original mortgage of |
| | a. $624552 with a payment of 3,744.50 with 12 years remaining? |
| | b. $190788 with a payment of 1,143.87 with 15 years remaining? |
| | 15. Stock. What is the required rate of return on a stock with a |
| | a. $0.5 expected dividend and a 34 price with 7% growth? |
| | b. $0.25 expected dividend and a 15 price with 8% growth? |
Caiden
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