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Calculating: present value, long-term value, N Periods, value of a dollar, value of an investment, monthly payment and more...

1. What is the present value of $800 received 5 years from today. Use a discount rate of 3% and semiannual compounding. Choose and place on the answer sheet the best answer from those provided below and attach your supporting work.

2. If you have $1000 today, invest it in an investment that pays 10% interest quarterly for 10 periods how much money will you have at the end of the 10th period. Choose and place on the answer sheet the best answer from those provided below and attach your supporting work.

3. You invest $5 today in an investment that pays 5% interest annually. After N periods you have $7. How many periods is N periods? Choose and place on the answer sheet the best answer from those provided below and attach your supporting work.

4. The concept that a dollar today is worth more then a dollar in the future is _________. Choose and place on the answer sheet the best answer from those provided below.

5. You invest $7150 today in an investment that pays interest semiannually. If after 5 years you have $9000 how much interest does the investment pay? Choose and place on the answer sheet the best answer from those provided below and attach your supporting work.

6. If you take out a $250,000 loan at 8% interest compounded monthly for 8 years what will your monthly payment on the loan be. Choose and place on the answer sheet the best answer from those provided below and attach your supporting work.

Solution Preview

1. What is the present value of $800 received 5 years from today? Use a discount rate of 3% and semiannual compounding. Choose and place on the answer sheet the best answer from those provided below and attach your supporting work.
FV = 800
N=5*2 = 10
Rate = 3% / 2 = 1.5%
By a financial calculator, we compute PV = 689.33

2. If you have $1000 today, invest it in an investment that pays 10% interest quarterly for 10 periods how much money will you have at the end of the 10th period. Choose and place on the answer sheet the best answer from those provided below and attach your supporting ...

Solution Summary

You will find the answer to these puzzling questions inside...

$2.19