finance accounting Introduction to Finance FIN2030 Week 2, Assignment 2 Part One
ID: 2613345 • Letter: F
Question
finance accounting
Introduction to Finance FIN2030 Week 2, Assignment 2 Part One: Quantitative Exercises Questions Answers 1. Future Value. What is the future value of a. $800 invested for 14 years at 11 percent compounded annually? 3448.35 b. $210 invested for 8 years at 9 percent compounded annually? 418.38 c. $650 invested for 12 years at 8 percent compounded annually? 1636.81 2. Present Value. What is the present value of a. $803 to be received 18 years from now at a 10 percent discount rate? 144.43 b. $406 to be received 7 years from now at a 5 percent discount rate? 288.54 c. $400 to be received 10 years from now at a 9 percent discount rate? 168.96 3. Future Value of an Annuity. What is the future value of a. $557 a year for 12 years at 5 percent compounded annually? 9,330.13 b. $748 a year for 9 years at 12 percent compounded annually? c. $442 a year for 7 years at 11 percent compounded annually? 4. Present Value of an Annuity. What is the present value of a. $1,163 a year for 12 years at an 7 percent discount rate? 9954.76 b. $329 a year for 6years at a 12 percent discount rate? 1368.78 c. $365 a year for 20 years at a 14 percent discount rate? 2242.77 5. How many years will it take to grow a. $765 to a value of 2,028.19 at a compound rate of 14 percent? 8 b. $321 to a value of 450.22 at a compound rate of 12 percent? 5 c. $881 to a value of 1,305.78 at a compound rate of 7 percent? 5 6. Interest Rate. At what interest rate will it take to grow a. $800to a value of 1,017.13 over 6 years? 5% b. $600 to a value of 1,082.08 over 5 years? 12% c. $401 to a value of 1,311.16 over 6 years? 11% 7. Car Loans (Hint: P/Y=12). How much is a car loan with a payment of a. $453 per month for 3 years at 6% interest per year? 8447.85 b. $466 per month for 5 years at 15% interest per year? 18,369.12 c. $301 per month for 6 years at 7% interest per year? 16,071.32 8. Mortgages (Hint: P/Y=12). What was the initial mortgage on the house? a. $4,369.66 per month for 30 years at 8 percent interest? 553,253.35 b. $1,626.83 per month for 15 years at 4 percent interest? 159,035.24 c. $3,724.21 per month for 30 years at 18 percent interest? 563,949.90 9. Mortgages (Hint: P/Y=12). What is the payoff on a 30 year, 6% mortgage of a. $255,413 with a payment of 1,321.33 with 8 years remaining? 104,824.80 b. $530,493 with a payment of 3,180.57 with 12 years remaining? 264,920.57 c. $297,266 with a payment of 1,782.26 with 11 years remaining? 192,734.38Explanation / Answer
3) b)
Future value of annuity:
= P×[(1+r)^5n-1]÷r
= $748×[(1+12%)^9-1]÷12%
= $11,052.2
3) c)
Future value of annuity:
= P×[(1+r)^5n-1]÷r
= $442×[(1+11%)^7-1]÷11%
= $4,324.21
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