Purchase Solution

Investments Scenarios - Time Value of Money

Not what you're looking for?

Ask Custom Question

A. Starting with $10,000, how much will you have in 10 years if you can earn 15 percent on your money?
b. If you inherited $25,000 today and invested all of it in a security that paid a 10 percent rate of return, how much would you have in 25 years?
c. If the average new home costs $125,000 today, how much will it cost in 10 years if the price increases by 5 percent each year?
d. If you can earn 12 percent, how much will you have to save each year if you want to retire in 35 years with $1 million?

Purchase this Solution

Solution Summary

The solution has various questions relating to time value of money

Solution Preview

a. Starting with $10,000, how much will you have in 10 years if you can earn 15 percent on your money?

We have a lump sum and we have to find the future value. The future value of a lump sum is calculated as
Future Value (FV)= Present Value (PV) X (1+r)^n
Where r is the interest rate and n is the time period. In this problem
PV = 10,000
R=15%
N=10 years
FV = 10,000 X (1+15%)^10 = 40,455.58
In 10 years you will have ...

Purchase this Solution


Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.