Share
Explore BrainMass

The Time Value of Money

Calculating time period and future value in the given cases

1. If you presently have $6,000 invested at a rate of 15%, how many years will it take for your investment to triple? (Round up to a whole number of years if necessary) 2. You deposit $1,000 in a savings account that pays 8% compounded quarterly. How much money will you receive if you close the account after 18 months?

Present value calculations

Using a present value table, your calculator, or a copmuter program present value function, answer the following questions: A. What is the present value of nine annual cash payments of $8,000, to be paid at the end of each year using an interest rate of 6%? B. What is the present value of $30,000 to be paid at the end of

Calculate Monthly Installment: Time Value of Money

Your client, Wyeth Leasing Company, is preparing a contract to lease a machine to Souvenirs Corporation for a period of 25 years. Wyeth has an investment cost of $421,087 in the machine, which has a useful life of 25 years and no salvage value at the end of that time. Your client is interested in earning an 11% return on its inv

Finance Problem: Time Value of Money

Your aunt has $640,000 invested at 5.5%, and she now wants to retire. She wants to withdraw $45,000 at the beginning of each year, beginning immediately. She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. For how many years can she make the $45,000 withdrawals and still have $50,0

EPS: Time to Double

Last year Mason Corp's earnings per share were $2.50, and its growth rate during the prior 5 years was 9.0% per year. If that growth rate were maintained, how many years would it take for Mason's EPS to double?

Important information about Time Value of Money Questions

Determine the amount that must be deposited now at compound interest to provide the desired sum for each of the following: 1. Amount to be invested for 10 years at 6% per annum, compounded semiannually, to equal $17,000. 2. Amount to be invested for 2 1/2 years at 8% per annum, compounded quarterly, to equal $5,000. 3. A

Calculating Present Values

You just won the TVM Lottery. You will receive $1milliion today plus another 10 annual payments that increase by $400,000 per year. Thus, in one year, you receive $1.4 million. In two years you get 1.8 million, and so on. If the appropriate interest rate is 9 percent, what is the present value of your winnings?

Present Value and Scenario Evaluations

Please see attached. Please create your response with the corresponding number or letter, based on how the question(s) is written. Also, I need the answer to be saved as an image of any kind. It cannot be in text of any kind. After you type it, please take a screen shot of it and save the screen shot(s) as an image. I

Time Value of Money Problems

1) At the end of 2005, Uma Corporation was considering undertaking a major long-term project in an effort to remain competitive in its industry. The production and sales departments determined the potential annual cash flow savings that could accrue to he firm if it acts soon. Specifically, they estimate that a mixed stream o

Present & Future Values, Annuity Payments, Growing Perpetuitya

5.1 Future value: Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the investment in 10 years? 5.30 Patrick Seeley has $2,400 that he is looking to invest. His brother approached him with an investment

Calculate Amount to Save for Retirement in Several Scenarios

Assumptions: 1. Your required rate of return until retirement is 8% 2. Your retirement payout will be a fixed payment, and will be adjusted for a much more conservative return of 5%. This will be your return on the payout until you die. Process: Using the time value of money, you will need to calculate how much you

Time Value of Money: College and Retirement Funds

See the attached file. Please provide the answer in a word document. Provide the answer in detail. Clearly state all the calculations and figures in the word document. You can also write the calculations and scan.

Calculations

1. Simple Interest versus Compound Interest - First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made $5,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years

Explain how to complete 5 problems using TVM functions

After graduation, you plan to work for Mega Corporation for 10 years and then start your own business. You expect to save $5,000 a year for the first 5 years and $10,000 annually for the following 5 years, with the first deposit being made a year from today. In addition, your grandfather just gave you a $10,000 graduation gift

Retirement planning problems for Pat and Chris. Use time value of money concepts

The following retirement problem is often used to illustrate important aspects of savings and compound interest - see what you can learn by working the problem. Pat and Chris are both recent MBA graduates and are each 25 years old. They both plan on retiring when they are 65 years old. Pat has decided to put $5,000 into an

Finance Time value of money: Compute annual deposits for retirement with growth

30. You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 30th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a saving account. If the inte

Finance

1. Calculate the future value of $2000 in a) 5 years at an interest rate of 5% per year. b) 10 years at an interest rate of 5% per year. c) 5 years at an interest rate of 10% per year. d) Why is the amount of interest earned in pat (a) less than half the amount of interest earned in part (b)? 2. You are thinking of r

Interest rates and Time Value problem

1) Calculate the future value of $2000 in a) 5 years at interest rate of 5% per year b) 10 years at an interest rate of 5% per year c) 5 years at an interest rate of 10% per year d) why is the amount of interest earned in part (a) less than half the amount of interest earned in (b) 2) You are thinking of retiring. Your

Finance: Loan for engagement ring, sabbatical policy. Time value of money (TVM)

Problem 1 chapter 4 You have just taken out a five-year loan from a bank to buy an engagement ring. The ring costs $5000.You plan to put down $1000 and borrow $4000. You will need to make annual payments of $1000 at the end of each year. Show the timeline of the loan from your prospective. How much would the timeline differ if

Calculating present worth of the future payments

Your parents are giving you $500 a month for five years while you attend college to earn both a bachelor's and a master's degree. At a 7 percent discount rate, what are these payments worth to you when you first enter college? Please 1) solve by hand (please show formula) and (2) provide financial calculator inputs and che

Real Estate Finance Problems

Need help with the following problems. I would like see how to solve each problem with a formula and what inputs you would use when using a financial calculator. 1. Your parents are giving you $500 a month for five years while you attend college to earn both a bachelor's and a master's degree. At a 7 percent discount rate, w

Determining Present and Future Value of Windfall

You have just received a windfall from an investment you made in a friend's business. He will be paying you $10,000 at the end of this year, $20,000 at the end of the following year, and $30,000 at the end of the year after that (three years from today). The interest rate is 3.5% per year. a. What is the present value of

Time Value of Money: Ordinary Annuity and Annuity Due

There are 3 parts to this; part of this has been completed 1. Present value calculation 2. Future value of annuity: ordinary annuity and annuity due 3. Loan interest deductions 1. Present value calculation: A PVIF  1  (1  0.02)4  ?? B PVIF  1  (1  0.10)2 

Future Value

Future value tables Use the future value interest factors in Appendix Table A-1 in each of the cases shown in the table on the facing page to estimate, to the nearest year, how long it would take an initial deposit, assuming no withdrawals, a. To double. b. To quadruple. Case Interest Rate A 7% B

Future Value and Annuity: Total trust fund payments

A client is given a trust fund worth $1,000,000.00. He can't access any money until he turns 65, which is in 25 years. At that time, he can withdraw $25,000 per month. If the trust fund is invested at a 5.5% rate, how many months will it last him once he starts withdrawing the money (until there is none left)?

Financial Management - Sample quiz questions

Can you help? I'm stuck on a few True/False questions... Chapter 1 1. A financial analyst is responsible for maintaining and controlling the firm's daily cash balances. Frequently manages the firm's short-term investments and coordinates short-term borrowing and banking relationships. 2. Finance is concerned

Actions to Increase Money Supply

Let's say that the Fed decides to focus on the creating jobs in the economy. It will do this by increasing the money supply. What actions can the Fed take to increase the money supply?