Present Value Rate Time Compounding Frequency Table Factor Future Value a. 5,000 12% 2 years Annual b. 5,000 12% 2 years semiannual c. 5,000 12% 2 years quarterly d. 5,000 12% 2 years Monthly
Question 2 Cindy has decided to retire in 24 years. She has $30,000 available today and wants to invest money to supplement her pension plan.
b) Assume Cindy wants to accumulate $150,000 by her retirement day. Will she achieve her goal if she invests $30,000 today and earns 6 percent? Please show your calculations supporting your yes/no answer a) If Cindy invests a total of 30,000 through a series of 24 equal annual installments at the end of the year instead of a single amount, would Cindy accumulate the desired $100,000 at the 6 percent annual interest? The First investment would be made one year from today. Please show your calculations to support your answer
Question 3 Rusty Smith plans to choose one of three investments. Inestments A, pays $2,500 at the end of each year for three years. Investment B Pays $85,000 at the end of five years. Investment C pays $1,000 at the end of each year for four years and pays $4,000 at the end of the fifth year. Rusty requires a return of 7 percent on each of these investments a. What is the present value of investment A b. What is the present value of investment B c. What is the present value of investment C
Question 4 You have decided to purchase a boat you have found a well-running board that will cost you $29,500. You can finance your purchase through the dealer at an annual rate of 24 percent for 24 months. The dealer requires a down payment of 8,000 a. What will be the amount of your monthly payments
b. What will be the total amount paid to the dealer over the life of the loan c. What will be the total amount of interest?