Various Time Value of Money Problems
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52. Bank One loans ABC Corporation $50,000 to buy a piece of equipment. Bank One accepts a note due in 2 years with interest at 12% compounded monthly. How much cash does Bank One expect to receive when the note is paid at maturity?
53. Neal Carter wants to establish a retirement fund for him and his wife. They want to have $1,000,000 in the fund at the end of 30 years. If fund assets will earn 10% compounded annually, how much will need to be invested now?
54. Mike and Amy want to start a college fund for their newborn son, Mason. They are investing $10,000 today. If interest is 6% compounded annually, how much will be in the fund when Mason turns 18 and goes to college?
55. Sarah Halvorsen wants to buy her daughter a car for her 18th birthday. If Sarah's daughter is turning 15 today and interest is 10% per annum compounded semiannually, what would her semiannual investment need to be if the car will cost $28,000 and the 1st payment is made 6 months from today?
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Solution Summary
Using Excel 97-2003, this solution illustrates how to solve various time value of money problems involving lump-sums and annuities.
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