Purchase Solution

Compound Interest, Future Value and Present Value

Not what you're looking for?

Ask Custom Question

You have inherited $60,000 and plan to buy a new home. If you invest $60,000 today at 5% compounded annually, how much could you spend on the house in 1 year? If you intend to spend $60,000 on a house in 1 year, how much of your inheritance should you invest today at 5%, compounded annually? How much do you have left to spend on a car?

Purchase this Solution
Solution Summary

This solution is comprised of a detailed explanation to answer how much could you spend on the house in 1 year.

Solution Preview

You have inherited $60,000 and plan to buy a new home. If you invest $60,000 today at 5% compounded annually, how much could you spend on the house in 1 year? If you intend to ...

Purchase this Solution
Free BrainMass Quizzes
Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

View More Free Quizzes
Related BrainMass Solutions

  • Effects of Interest Rates on Future and Present Value

    111853 Effects of Interest Rates on Future and Present Value What impact do interest rates have on the calculation of future and present value? How does the length of time affect future and present value?

  • Simple and Compound Interest; Present and Future Values

    125667 Simple and Compound Interest; Present and Future Values Part A: What is the difference between "simple" and "compound" interest? What are some of the uses of compound interest in business?

  • Time Value of Money

    You will need to include and define/explain the concepts of "future value", annuities, present value, cash flows, compound interest and opportunity cost in your answer

  • Difference between "simple" and "compound" interest

    Time value of money always use compound interest. Thus it is used to find the present value, future value of any amount and annuity. It is used in capital budgeting to calculate the net present value of the project.

  • Time Value of Money Relationships

    Discuss why accountants should have an understanding of compound interest, annuities, and present value concepts. So what you can do is go over the present, future value formulas.

  • Compound interest, Present value and Time Value of Money

    What are the effects of using compound interest when evaluating future value transactions and calculations. 2. What is "present value"? What is an example of the "present value" concept?

  • Compound interest rate formula

    Future value = Present value *(1+r/t)^(n*t) =2200*(1+2.25%/12)^(4*12) =$2406.98= Answer C. 2% annual interest compounded daily.

  • Simple and compound interest; present value concept; and TVM.

    104550 Simple and compound interest; present value concept; and TVM. 1. Can you explain the difference between "simple" and "compound" interest? Please provide some of the uses of compound interest in business.

  • Calculating present value and future value

    521192 Calculating present value and future value Find the future value one year from now of a $7,000 investment at a 3 percent annual compound interest rate. Also calculate the future value if the investment is made for two years.

  • Relation between interest rate and future value factor

    the answer is increase This because the future value comes after incorporating the interest in the present value. We calculate the compound interest at the given interest rate to get the future value.

View More Related Solutions