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Find the present value of the following annuity due: $375 per month, for ten years, at 9 percent simple rate. Make sure to show your work 2. Find...
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4.You borrow $50,000 today. If the interest rate is 6 percent compounded monthly and you make monthly payments of $250, how long will it take you to pay off your loan? Make sure to show your work.
5. Your retirement account has a current balance of $50,000. What interest rate would you need to be earned in order to accumulate a total of $1,000,000 in 30 years, by adding $8,000 annually? Make sure to show your work.
6. What is the value of receiving $300 growing at 4 percent each year in perpetuity if the interest rate is 12 percent? Make sure to show your work.
7. Suppose that you will receive $250 tomorrow. You will then receive fourteen additional cash flows growing at 5 percent. If the interest rate is 10 percent, what is the value of these cash flows? Make sure to show your work.
8. Consider an investment costing $20,000. This investment will generate cash flows growing at 4 percent for 8 years. If the interest rate is 8 percent, what is the amount of the first cash flow? Make sure to show your work.
9. Your goal is to save $75,000 at the end of 8 years. Today, you deposit $10,000. You make an additional 5 yearly deposits growing at 5 percent. What must the interest rate be? Make sure to show your work.
