How does the Fed change the money supply with an open market purchase of the treasury securities. If it purchases $ 1Million, how much does the money supply increase?
Will you highlight some of the key components of Time Vlue of Money (TVM). Also will you identify at least one financial application of TVM employed by commercial banks, credit card financial services companies, insurance companies, state governments-lotteries and retirement plan financial service providers.
1. Could you explain why debtors benefit during periods of high inflation. Why would someone in Argentina want to have debt and why does money have a time value? 2. Also, how is the present value of a lump sum related to the present value of a stream of payments? How is this helpful for retirees that are considering taking
What is the present value of the following cash flow stream at an interest rate of 12.0% per year? $0 at Time 0; $1,500 at the end of Year 1; $3,000 at the end of Year 2; $4,500 at the end of Year 3; and $6,000 at the end of Year 4. A. $9,699.16 B. $10,209.64 C. $10,746.99 D. $11,284.34 E. $11,848.55
Your girlfriend just won the Florida lottery. She has the choice of $15,000,000 today or a 20-year annuity of $1,050,000, with the first payment coming one year from today. What rate of return is built into the annuity? A. 2.79% B. 3.10% C. 3.44% D. 3.79% E. 4.17%
Compute the present value of a $100 cash flow for the following combinations of discount rates and times: r = 8 percent. t = 10 years. r = 8 percent. t = 20 years. r = 4 percent. t = 10 years. r = 4 percent. t = 20 years
1. If you deposit money today into an account that pays 6.5 percent interest, how long will it take for you to double your money? 2. John Roberts has $42,180.53 in a brokerage account, and he plans to contribute an additional $5,000 to the account at the end of every year. The brokerage account has an expected annual return o
You have been asked to assist your friends with some personal financial planning. Following their current budget they find they are able to save approximately $10,000 per year. They expect their investments to grow at a nominal rate of 8% and you expect inflation to remain at approximately 4% per year. Your friends expect to
A) Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 10% per year. What amount will the company receive at the time t
If you invest $9,000 today, how much will you have in 25 years at 14 percent (compounded semiannually)? Please show step by step method (the formula) how you derive at the answer.
Question 1. On March 5th, a couple took out a 90-day loan for $450 at 9% interest. On March 29th, they made a partial payment of $150. After making the payment, how much did they still owe? a. $300.00 b. $300.90 c. $301.80 d. $302.70 Question 2: On January 10th, Park & Jason, Inc. took out a 3-month , 8% note fo
Sally Hamilton has performed well as the chief financial officer of the Maxtech Computer Company and has earned a bonus. She has a choice among the following three bonus plans: 1. A $50,000 cash bonus paid now; 2. A $10,000 annual cash bonus to be paid each year over the next six years, with the first $10,000 paid now. 3. A t
Mary established a savings account for her son's college education by making annual deposits of $6,000 at the beginning of each of six years to a savings account paying 8%. At the end of the sixth year, the account balance was transferred to a bank paying 10%, and annual deposits of $6,000 were made at the end of each year from
1. Carrie Tune will receive $19,500 for the next 20 years as a payment for a new song she has written. If a 10 percent rate is applied, should she be willing to sell out her future rights now for $160,000? 2. If you owe $40,000 payable at the end of seven years, what amount should your creditor accept in payment immediately i
Financial Management Questions. See attached file for full problem description. a. Find the FV of $1,000 invested to earn 10% after 5 years. Answer this question by using a math formula and also by using the Excel function wizard. Inputs: PV = 1000 i = 10% n = 5 Formula: FV = PV(
I am doing an assignment on Time value of money and how annuities affect TVM problems and investment outcomes. I also need information on the following 1) Interests rates and compounding 2) present value of future payment received 3) future value of investment opportunity cost and annuities and the rule of 72.
Future Values- Compute the future value of a $100 cash flow for the same combinations of rates and times as in problem 1. a. r= 8 percent. t= 10 years b. r=8 percent t = 20 years c. r=4 percent t= 10 years d. r=4 percent t= 20 years
Why is Time Value of Money (TVM) important and how can it affect an organization's bottom line when utilized? Are you able to utilize this concept at home and how?
My corporation loans money to a subsidiary, in the amount of $600,000. We accept an 8% note due in 7 yrs. with interest payable semi-annually. After 2 yrs. (and receipt of interest for 2 yrs), we need money, therefore we sell the note to Bank of America, which demands interest on the note of 10% compounded semi-annually. What is
Using the time value of money concepts, offer guidance, include the following in your answer. 1-What TVM concept(s) is represented in the situation? 2-What is the value of the money represented by the situation? 3- How did you arrive at the value? Question 1 I have $10,000 cash to invest with a bank offering a 4% interest
I have a 30-year $100,000 mortgage loan with an APR of 6% and monthly payments. In 12 years I will sell my home and pay off the mortgage. What is the principal balance on the loan?
A home buyer signed a 20-year, 8% mortgage for $72,500. Given the following information, how much should the annual loan payments be? Present value of $1 PVIF = .2 Future value of $1 FVIF = 5. Present value of annuity PVIFA = 9.818 Future value of annuity FVIFA = 46.0 A) $5,560 B) $7,384 C) $8,074
Suppose you inherited $200,000 and invested it at 6% per year. How much could you withdraw at the beginning of each of the next 15 years?
I am lost on the formulas for this question. I do not understand with the ^n stands for in the formula. What is the future value of $15,000 if it is invested at 7.5% for a period of 13 years annually? What is the future value of $20,000 if it is invested at 6.5% for a period of 9 years quarterly? What is the present
Time Value of Money (TVM) Identify at least one financial application of TVM employed by each of the following businesses: A) Commercial Banks B) Credit card financial service companies B) Insurance companies D) State governments - lotteries E) Retirement plan financial service providers Please provide spec
Discuss: What is present value? What is future value? Would you rather have one dollar today or two dollars a year from now? Why?
1. Super-Fix Company would like to move its auto repair shop to a downtown location in order to attract more customers. What is the maximum Super-Fix should pay to purchase a building at the new location, assuming that the company needs to earn 12%. The new building will last 40 years. Super-Fix estimates that moving to the new
If your parents give you one-third of the price of the car, what is the most you can spend on the new car?
2) Your parents will help pay for a car you will buy in 3 years. You have $7000 now and can earn 6% APR compounded monthly during the first year, and 7.5% APR compounded semi-annually during the second and third years. If your parents give you one-third of the price of the car, what is the most you can spend on the new car?
Me and my husband set aside $10,000 for college tuition when our daughter is 13, how much will be available when she starts college at 18 if the account in which the money is deposited pays 12 percent compounded monthly.
If I invest 10,000 I will receive at graduation (age 22) in a mutual fund which averages a 12% annual return, how much will I have at retirement in 40 years?