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Finance problem set: Future value, present value etc.

1.Dr. J. wants to buy a Dell computer which will cost $2,788 four years from today. He would like to set aside an equal amount at the end of each year in order to accumulate the amount needed. He can earn 7% annual return. How much should he set aside?
A) $697.00
B) 627.93
C) $823.15
D) 531.81

2. How much must you invest at 10% interest in order to see your investment grow to $5,000 in 5 years

A) $3,070
B) $3,415
C) 3,105
D)none of these

3. The future value of a $1,000 investment today at 8 percent annual interest compounded semiannually for 5 years is
A) $ 1,469
B) $1,480
C) $1,520
D) $1,555

4. Sydney saved $50,000 during her first year of work after college and plans to invest it for her retirement in 40 years. How much will she have available for retirement if she can make 8% on her investment?

A) $596,250
B) $12,953,000
C) $2,345,100
D)$ 1,086,250

5. Required return by investors is directly influenced by all of the following except
A) Inflation
B) U.S. Treasury rates
C) Dividends
D) Risk

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Solution Summary

The problem set deals with fundamental problems encountered in finance: present value, future value etc.