Future Value Questions and Answers

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Questions and Answers(7,919)

What is the Time Value of Money (TVM) concept, and why is it important in finance?

A financial advisor claims that a child can be made a millionaire with early savings. Starting on the day the child was born, $1,000 are put each year into an investment account that earns an APR o...

Suppose the current price of gold is $1,580 an ounce. Hotshot Consultants advises you that gold prices will increase at an average rate of 10% for the next two years. After that the growth rate wil...

If $50 was invested at 6% on January 1, year 1, what equal year-end withdrawals could be made each year for ten years, leaving nothing in the fund after the tenth withdrawal? Show your complete sol...

Newman Bowie is planning ahead to ensure he has enough funds for an engine overhaul on his vintage used car in 5 years. To determine the amount he should set aside today, let's break down the probl...

If you are twenty years old and can save $1,000 a year for the next five years, how much would you have at the age of 67 if you invested it in the stock market at an interest rate of 8%?

Bob Terwilliger received $16,373 for his services as financial consultant to the mayor's office of his hometown of Springfield. Bob says that his consulting work was his civic duty and that he sho...

Leah deposited RM350 monthly into an investment scheme that offers an interest rate of 3.8% compounded monthly. After 5 years of the investment, she withdrew all the money to pay the down payment f...

Suraiya saved RM7,000 into an account that paid 4.5% compounded semi-annually. Five years later, she withdrew RM3,000 from the same account. Find: (a) the total amount at the end of five years. (...

How much money does Tisha need to put into an investment account if she wants to have $100,000 in ten years and the investment pays 12% annually?

Find the future value. $5,481 invested for 4 years at 4% compounded annually

What is the future value of a series of $5,000 end-of-the-year cash flows to be received forever if the required rate of return is 6.00% per year and the first cash flow is one year from today? A....

Present Value=36,500, 20 years, Interest Rate=12%. What is the future value?

Find the present value of $300 due in the future under this condition: 9% nominal rate, semiannual compounding, discounted back 6 years.

Calculate the future value of $600 after 3 years assuming an annual interest rate of 7%.

What is the amount of compound interest earned after three years on a $100 deposit paying 8 percent interest annually?

What is the future value of $3,000 invested today for 3 years at 12 percent APR compounded annually? What is the future value if the 12 percent APR is compounded monthly?

An agreement allowed payments of $240 due at the end of each month to be delayed. If interest is 5.4% compounded monthly, how much was owed at the end of 16 months?

What is the future value at the end of year 15 of $10,000 deposited today into an account that pays interest of 4.5% p.a., but with daily compounding (assume 365 days per year)?

Bank A pays 2 percent interest compounded monthly on any savings, whereas Bank B pays 3.5 percent interest compounded quarterly. If you made a R10,000 deposit in each bank, how much more money woul...

What is the value on January 1, 2023, of $40,000 deposited on January 1, 2016, which accumulates interest at 12% compounded annually?

Suppose you want to have $700,000 for retirement in 30 years. Your account earns 10% interest. A) How much would you need to deposit in the account each month? B) How much interest will you earn?

Calculate the future value of $1,200 after 2 years assuming an annual interest rate of 7%.

Travis invests $10,000 today into a retirement account. He expects to earn 8 percent, compounded annually, on his money for the next 26 years. After that, he wants to be more conservative, so only...

Find the savings plan balance after 4 years with APR of 3 years, 3% and monthly payments of $250.

$100 at the end of three years is worth how much today, assuming a discount rate of 100 percent, 10 percent, and 0 percent?

Today, Thomas deposited $150,000 in a 4-year, 12% CD that compounds quarterly. What is the maturity value of the CD? a. $336,989 b. $240,706 c. $168,000 d. $300,724

What is the present value of $16,000 in 5 years at 12 percent?

A couple saves $5,000 a year for five years at 5% interest by depositing $5,000 into a bank account at the end of each year. a) Show that the future value of this annuity of five payments at the en...

Using the information provided in the following table, find the value of each asset (A to E). {Cash flow} Appropriate} Asset End of Yea Amount required return} A 1 $7,000 8% 2 $7,000 3 $7,000 B...

While vacationing in Knysna, John Kelley saw the vacation home of his dreams. It was listed with a sale price of R200,000. The only catch is that John is 40 years old and plans to continue working...

Jeanne has just graduated from high school and has received an award for R5,000. She would like to deposit the money in an interest-earning account until she graduates from college (i.e., four year...

Calculate the present value of payments of RM5,000 per year for 4 years if the first payment starts at the end of the 4th year given an annual interest

Calculate the equivalent value in today's dollar of RM25,000: i. expected to occur 10 years from today given the cost of capital is 5 percent per annum.

Alexander has just won an Interior Design contest. Suppose that Alexander has an opportunity cost of capital of 10 percent per annum paid semi-annually

If a security currently worth $12,800 will be worth $16,124.31 three years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposi...

Your father is 50 years old and will retire in 10 years. He expects to live till 85 after he retires. He wants a fixed retirement income that has the same purchasing power at the time he retires as...

Determine the interest on the following notes. a. $58,940 at 6 percent for 60 days. b. $14,280 at 9 percent for 30 days. c. $30,600 at 12 percent for 60 days. d. $21,070 at 10 percent for 90 days...

If Nicolai earns a 10% after-tax rate of return, $14,000 today would be worth how much to Nicolai in 5 years? a. $14,000. b. $8,701. c. $12,728. d. $22 547. e. $15,400.

Bob has saved $585 each month for the last 4 years to make a down payment on a house. The account earned an interest rate of 0.44 percent per month. How much money is in Bob's account?

On July 1st, 2013, BBB Inc. took out a five-year, $30,000 loan from the bank. The loan has an interest rate of 5% annually. Interest is paid each year on the date the loan was issued. What adjustin...

If the pension plan needs to accumulate $14 million in 13 years, how much must it invest today in an asset that pays an annual interest rate of 4 percent?

Ryan has just deposited $10,000 in a bank account. The account pays 12% interest, compounded quarterly. How much will Ryan have in the account at the end of seven years? a. $4,371 b. $4,523 c. $18,...

Present value = $125,000 Interest rate = 6% Time frame = 6 years Calculate the future value.

Present value = $125,000 Interest rate = 6% Time frame = 4 years Calculate the future value.

Future value = $170,000 Interest rate = 8% Time frame = 4 years Calculate the present value.

What is the future value of $2,968 invested for 9 years at 4.9 percent compounded annually? a. $3,680.90 b. $4,565.03 c. $3,690.38. d. $7,021.38 e. $6,884.70

An effective interest rate is: a. The stated annual interest rate of a loan which does not account for compounding. b. The actual interest rate earned or charged which is affected by the number of...

You received a $1 savings account earning 6% on your 1st birthday. How much will you have in the account on your 30th birthday if you don't withdraw any money before then? a. $4.82 b. $5.11 c. $5.4...

Discounting is: a. Converting present value into its future value. b. Value today of a payment to be received. c. Calculating the future value using a formula. d. Converting future cash flows in th...

Your car dealer is willing to lease you a new car for $299 a month for 60 months. Payments are due on the first day of each month, starting with the day you sign the lease contract. If your cost o...

What is the present value of $100,000 at the end of year 9 if the discount is 11%?

What is the real future value of $500 after 10 years if the nominal interest rate is 13% and inflation is 2%?

A homeowner bought their home for $300,000 and wants to determine their potential property appreciation. Using the future value formula, what would the value of the home be in five years if it appr...

What is the future value of a 7-year annuity due with annual payments of $241, evaluated at a 15.71 percent interest rate?

Suppose you place $55 in a bank account that earns 6% interest. How much would you have accumulated in the account after 2 years if the bank offers interest paid continuously?

What is the future value of a 5-year annuity due with annual payments of $1,905, evaluated at an 11.16 percent interest rate?

If an investment of $45,000 is earning an interest rate of 4.00%, compounded annually, then it will take ________ for this investment to reach a value of $50,618.88 - assuming that no additional de...

Say that the interest rate is 11% and you invest $200 today, and then another $220 exactly one year from today. What is the total future value of these investments two years from today? a. $490.62...

Briefly explain the meaning of the time value of money in finance.

Compute the future value. Present value: $181,796 Years: 8 Interest rate: 6%

Solve for the interest rate. Express your answer as a percent rounded to 2 decimal places. Present value - $38,000, 18 years, Future value - $163,663

The Portland Stallions professional football team is looking at its future revenue stream from ticket sales. Currently, a season package costs $450 per seat. The season ticket holders have been pro...

Compute the future value. Present value: $2,150 Years: 11 Interest rate: 13%

If you earn an annual interest rate of 9 percent, how many years will it take to triple your money?

Hillary deposited money in her retirement account 11 years ago. Today her account has $45,750 in it. Assuming a 10% interest rate, how much did Hillary deposit 11 years ago?

You have deposited $42,000 into an account that will earn an interest rate of 12% compounded semiannually. How much will you have in this account at the end of seven years? A. $92,848.62 B. $71,218...

You expect to receive some cash gifts from relatives at graduation two years from today. You plan to invest it at 9% until it has doubled. How many years will you have to wait until that happens?

You want to buy your dream car which will cost you $5,900. If you could invest your entire savings of $4,000 at an annual interest of 10%, how long (in years rounded to two decimal places) would yo...

You have $15,000. Assuming you earn 6%, how long will it take for your money to double?

Exactly 3 years ago, Carlos deposited $791 into a savings account that earned 1% annual interest, compounded quarterly. There have been no other deposits and no withdrawals. What is the account bal...

What is the future value of a deposit of $380 left in an account paying 8% annual interest for 15 years?

If Lucy earns a 6% after-tax rate of return, $19,000 received in four years is worth how much today? a. $15,048. b. $17,884. c. $19,000. d. $20,649. e. None of the choices are correct.

If you deposit $1,000 into a bank account that pays 0.25% per month, what is the amount your account will be worth after 5 years?

Find the future value of $1,100 every year for 10 years at 8 percent.

How much will $7,000 grow in 12 years at 7%?

In five years we need $125,000. How much do we deposit today if the annual interest rate is 8%, compounded annually?

Find the following value. Compounding/discounting occurs annually. An initial $500 compounded for 10 years at 8%.

Why are present value and future value concepts so important in leasing and in other areas of accounting? Explain.

How much should you deposit today to have $7,000 in five years if your investment earns a rate of 3% per annum?

You have deposited $42,000 into an account that will earn an interest rate of 12% compounded semiannually. How much will you have in this account at the end of 10 years? a. $154,904.64 b. $148,169....

If you invest $8,000 in an account that pays 5% interest compounded monthly, how much money will you have at the end of 9 years?

You just received $50,000 from an insurance settlement and have decided to invest it into an annuity earning 8% interest. How much will it be worth in 18 years, as long as you do not withdraw any o...

You are the CFO of a company that is rapidly growing. To meet sales forecasts, you anticipate that you will need to buy a new piece of machinery in two years that costs $1,000,000. Your bank has ag...

Find the present value of $4,100 5.7% compounded continuously for three years.

What is the accumulated sum of the following stream of payments? $3,681 every year at the beginning of the year for 10 years at 8.43 percent compound annually.

Suppose you deposit $2,743.00 into an account today that earns 14%. In 15 years, the account will be worth how much?

Consider the following information and compute the present value. | Years | Interest Rate | Future Value | 16 | 12% | $798,382

How much money will you have 25 years from now, if you deposit $1,000 into a bank account at the end of each year? Assume that the bank gives an interest rate of 2% compounded annually.

Calculate the future value of $20,000 invested now (time zero) for 5 years. It grows at a rate of 3% per year compounded annually.

What is the future value of $100 after 3 years if it earns 4%, annual compounding?

Using the time value of money tables, calculate the following: The future value of $450 six years from now at 7 percent.

Determine the following: The future value of a $500 savings deposit after eight years at an annual interest rate of 7 percent.

Determine the following: The future value of saving $1,500 a year for five years at an annual interest rate of 8 percent.

Suppose a security pays you $60 at the end of each year for the next three years, and you'll receive (an additional) $500 in three years from the security. The required return on the security is 4%...

You're trying to save to buy a new $206,000 Ferrari. You have $56,000 today that can be invested at your bank. The bank pays 6.4 percent annual interest on its accounts. How long will it be before...

Upstate University charges $23,000 a year in graduate tuition. Tuition rates are growing at 3.25% each year. You plan to enroll in graduate school in five years. What is your expected graduate tuit...

Compute the future value of $2,000 compounded annually for 10 years at 12 percent.

Compute the future value of $2,000 compounded annually for 10 years at 7 percent.

You want to have $31,664 in cash to buy a car in 4 years. You expect to earn 11.5% per year on your savings. If you plan to invest $2,500 at the beginning of each year, how much additional money do...

What is the future value of $100 at an 8 percent interest rate 15 years in the future?

If Samantha invests $835.31 today in an account that pays 4.78% interest compounded annually, how much will she have in her account 19 years from today?

You deposit $28,000 today in a bank that promises to pay an annual interest of 10%? What is future value of this sum at the end of 8 years? What is the FV of the sum if the interest rate is 5% for...

Chuck Brown will receive from his investment cash flows of $3,125, $3,460, and $3,800 at the end of years 1, 2 and 3 respectively. If he can earn 7.5 percent on any investment that he makes, what i...

What would you pay for an investment that pays you $5,300,000 after fifty years? Assume that the relevant interest rate for this type of investment is 8%.

What is the future value of 15 deposits of $2,560 each made at the beginning of each period and compounded at 10%? (Round factor values to 5 decimal places, e.g. 1.25124, and final answer to 0 deci...

Adams Fillmore's lifelong dream is to own his own fishing boat to use in his retirement. Adams has recently come into an inheritance of $438,200. He estimates that the boat he wants will cost $326,...

Using a 360-day year, the maturity value of a 90-day note for $3,500 at 8% annual interest is: a. $3,780. b. $3,710. c. $3,570. d. $3,500.

The approximate time that it takes a deposit to double at a certain interest rate is calculated by dividing the annual interest rate by the number: a. 36. b. 48. c. 72. d. 100.

Jane wants to set aside funds to take an around the world cruise in five years. Jane expects that she will need $28,000 for her dream vacation. If she is able to earn 8% per annum on an investment,...

Given below are the present value factors for $1.00 discounted at 10% for one to five year periods, with interest compounded annually:||Periods||Present value of $1Discounted at 10% per Period|1|...

Bonita Industries will invest $880,000 today. The investment will earn 6% for 5 years, with no funds withdrawn. In 5 years, the amount in the investment fund is: A. $880,000. B. $1,144,000. C. $1,1...

Calculate the present value of a $1,000 discount bond with five years to maturity if the yield to maturity is 6%.

Your brother has offered you either $55,000 today or $110,000 in 8 years. if the interest rate is 7% per year which option is preferable? The present value of the future amount is _____.

You are thinking of buying a miniature gold course. It is expected to generate cash flows of $40,000 per year in years 1 through 4 and $50,000 per year in years 5 through 8. If the appropriate disc...

What is $1750 at 5.6% for 2 years compounded semi-annually?

A term associated with future value is "compounding"; a term associated with present value is "discounting". a. True b. False

Which of the following comes closest to the value at the end of year 7 of $600,000 deposited today in a bank that pays interest at the rate of 7.25% compounded monthly? a. $995,159 b. $1,042,555 c....

You have deposited $600 in the bank today and you plan to leave it on deposit for the next 12 years. You will earn 5% per year from the bank. What is the total amount you will have at the end of tw...

Use the future value formula to find the indicated value. n = 29; i = 0.04; PMT = $75; FV = ?

What is the present value of an investment that promises to pay you $1,000 in five years if you can earn 6 percent interest compounded annually? Show your complete solution.

Calculate the future value of the principal $1,000 invested today at a 7% rate in 8 years.

A trust has been established to fund scholarships in perpetuity. The next annual distribution will be $1,200 and future payments will increase by 3 percent per year. What is the value of this trust...

If $100 is placed in an account earning a nominal 9%, compounded monthly, what will it be worth in 20 years? How much will it be if it is with annual compounding?

What is the present value of a $7,000 payment made in six years when the discount rate is 4 percent?

How would an increase in the interest rate(r) or a decrease in the holding period(n) affect the future value(FV_n) of a sum of money? Explain why.

You invested $100,000, 5 years ago at a 7.5% annual interest rate. If you invest an additional $1,500 a year, at the beginning of each year for 20 years at the same 7.5% annual rate, how much will...

If you deposit $11,000 in a bank account that pays interest of 2%, compounded annually, how much will you have in the account after 10 years?

If you deposited $775 at 12% interest, what would you end up with at the end of 12 years if it was compounded annually?

Mr. Paulson has just borrowed $1,000 from Mr. Black. Mr. Paulson has agreed to pay Mr. Black $300 in one week, $400 in two weeks, and $500 in three weeks. If the interest rate is 1% per week, what...

What is the future value of $3,028 invested for 12 years at 5.50 percent compounded annually?

You are purchasing a 20-year, zero-coupon bond with a face value of $1,000. The yield to maturity is 7.2% based on annual coupon payments. What is the current market price?

True or False: A dollar received today is worth less than a dollar received in the future.

Find the future value at the end of 3 years of $225 invested today and on the next two anniversaries at an interest rate of 7 percent compounded quarterly.

The concept of time value of money is important to financial decision-making because: a) It emphasizes earning a return on investment capital. b) It recognizes that earning a return makes the $1 wo...

As the discount rate applied to a future value lump sum increases, the present value: a. stays the same b. increases by some amount c. doubles d. decreases e. There is not enough information to ans...

How long does it take for a deposit of $1,656 to triple in value if invested at the interest rate of 5.90%? a. 19.16 years b. 20.25 years c. 21.26 years d. 22.38 years e. 23.56 years

True or False: As the discount rate increases, the present value of future cash flows increases.

What is the future value of $4,000 in 5 years if it is invested at an interest rate of 6%? a. $5,300 b. $5,563 c. $5,353 d. $6,214 e. $6,431

James deposited $100,000 in a 2-year, 12% CD that compounds quarterly. What is the maturity value of the CD?

You put $1,000 in an investment account today which will earn 7% over the next 20 years. What is the future value?

An investment will pay you $33,000 in 12 years. If the appropriate discount rate is 6 percent compounded daily, what is the present value?

Your parents spent $7,800 to buy 200 shares of stock in a new company 12 years ago. The stock has appreciated 14.6% per year on average. What is the current value of those 200 shares? a. $36,408.70...

To what amount will $12,000 accumulate in 15 years if it is invested at an effective rate of 5%?

A deposit of $390 earns interest rates of 7.9 percent in the first year and 10.9 percent in the second year. What would be the second year's future value? A. $853.32 B. $463.32 C. $466.68 D. $834.56

Compute the value in 30 years of a $2,000 deposit earning 9 percent per year. (Round your final answer to 2 decimal places.)

You expect to receive $44,000 at graduation in two years. You plan on investing it at 10 percent until you have $179,000. How long will you wait from now? Round your answer to 2 decimal places.

Your daughter is considering two options for her career. The first is to go to law school at Harvard. You estimate this will cost you $500,000 and you will have to pay this in one lump sum 5 years...

Compute the future value of a $240,000 home purchased today which increases in value by 3.5% annually for 10 years.

You want to start saving for retirement. If you deposit $2,000 at the beginning of each year for the next 60 years and earn an 11% annual rate of return on the investment, how much will you have wh...

For Alicia Thompson, the last few years have been a financial nightmare. It all started when she lost her job. Because she had no income and no emergency fund, she began using her credit cards to o...

Bob bought some land costing $15,790. Today, that same land is valued at $45,617. How long has Bob owned this land if the price of land has been increasing at 4 percent per year? a. 11.56 years b....

Your financial advisor informs you of an investment that will pay you $12,000 per year for 10 years starting 30 years from now. Your advisor knows you do not have enough money available to afford t...

Carlos expects to receive $10,000 five years from now. Carlotta expects to receive $10,000 three years from now. Which one of the following statements is correct if both Carlos and Carlotta apply a...

Theo just won a prize that will pay him $12,000 a year for 12 years, starting at the end of Year 12. What is the current value of this prize if the discount rate is 9 percent, compounded annually?...

At an effective annual interest rate of 20 percent, how many years will it take a given amount to triple in value? A) 5 years B) 6 years C) 8 years D) 10 years

If you want $6,000 in 5 years to take a trip to Alaska and plan on making a lump sum deposit today to save for the trip, how much must that deposit be if you can earn 5% compounded quarterly? a. $2...

The future value of a $1000 investment today at 8 percent annual interest compounded semi-annually for 5 years is A) $1,469. B) $1,480. C) $1,520. D) $1,555.

Assume that in 2018, a copper penny struck at the Philadelphia mint in 1795 was sold for $375,000. What was the rate of return on this investment? (Do not round intermediate calculations and provid...

To what amount will the following investment accumulate? $5,629 invested today for 27 years a 4.06 percent, compounded monthly.

Assume the total cost of a college education will be $405,000 when your child enters college in 16 years. You presently have $67,000 to invest. What annual rate of interest must you earn on your in...

You have $20,059.81 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $200,000. You expect to earn 14% annually on the...

Investment X offers to pay you $7,900 per year for 9 years, whereas Investment Y offers to pay you $10,800 per year for 5 years. A) If the discount rate is 8 percent, what is the present value of t...

Assuming an interest rate of 14%, if you invest a lump sum of $7,000 now, the balance of your investment in 10 years will be closest to: A. $36,512 B. $25,949 C. $70,000 D. $1,890

In 1626, Peter Minuit, governor of the colony of New Netherlands, bought the island of Manhattan from Indians paying with beads, cloth, and trinkets worth $24. Find the value of this sum in the yea...

If an initial investment will be $100,000, which is better, a one-time return of $120,000 received in one year after the investment is made, or a return of $10,000 every month for that one year?

What is the present value of $13,550 to be received 3 years from today if the discount rate is 4.25 percent?

What is the present value of a security that will pay $20,000 in 20 years if securities of equal risk pay 7.5% annually? Round the answer to the nearest cent.

Find the future value of the following annuity. The first payment in the annuity is made at the beginning of Year 1; that is, it is an annuity due. Round the answer to the nearest cent. $400 per ye...

Your parents will retire in 16 years. They currently have $260,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming th...

Find the future value in six years of the following stream of payments: $400 received one year from now, $600 received two years from now, $500 received three years from now, and $800 received four...

$33,000 was just deposited in an account paying 10% interest, the money will be there for 7 years. How much will be in the account in 7 years?

Lara allocates wealth between youth and old age. In her youth, she has $8,000 in cash. She can lend and borrow at the bank 15 percent (that is, lending $1 in youth will give her $1.15 in old age)....

What is the future value of $500 invested at 8.94% compounded quarterly for 12.5 years (round to the nearest $1)? A. $1,617 B. $670 C. $1,510 D. $46,739

What is the future value of $700 deposited for one year earning a 4 percent interest rate annually?

Steve Madison needs $270,000 in 10 years. How much must he invest at the end of each year, at 11% interest, to meet his needs? Show your complete solution.

You plan to invest in securities that pay 10.2%, compounded annually. If you invest $5,000 today, how many years will it take for your investment to grow to $9,140.20? a. 6.21. b. 5.16. c. 7.27. d....

What is the future value of $20,000 after 20 years if the appropriate interest rate is 5.75%, compounded annually? (Round the answer to two decimal places.) a. $57,512.91 b. $61,183.95 c. $56,901.0...

Larry James is planning to invest $25,300 today in a mutual fund that will provide a return of 0.10 each year. What will be the value of the investment in 10 years?

You deposit $5,000 into a retirement account at the end of the next 15 years, earning 8% interest, what is the future value of your retirement after 15 years?

Ted invests $400 today at a 7% rate of return which is compounded annually. What is the future value of this investment after five years? (a) $428. (b) $500. (c) $540. (d) $561.

What is the future value of $2,400 in 19 years assuming an interest rate of 7.7 percent compounded semiannually?

a. What is the future value of $1 invested at 3% compounded continuously for 12 years? b. What is the future value of $100 invested at 3% compounded continuously for 12 years? c. What is the futu...

You have a current electric bill that averages $1200 per year. If you plan to retire in 20 years and inflation for electricity is 3% per year, what will your electric bill be in 20 years?

You have $2,000 today. What is the future value of this $2,000 in the next 25 years assuming an annual appreciation rate of 7.5%?

Investment X offers to pay you $4,400 per year for eight years, whereas Investment Y offers to pay you $6,500 per year for five years. a. Calculate the present value for Investment X and Y if the d...

John is 30 years old and wants to have 1 million dollars in savings by the time he retires at 65. He plans to open a savings account that pays 5% interest compounded quarterly and he will be making...

You expect to receive $11,000 at graduation in two years. You plan on investing at 12 percent until you have $97,000. How long will you wait from now? a. 17.21 years b. 23.75 years c. 23.33 years d...

What is the future value of $1,400 a year for 35 years at 6 percent interest? Assume annual compounding.

Find the accumulated future value of the continuous income stream at rate R(t), for the given time T and interest rate k, compounded continuously. R(t) = $500,000, T = 16 years, k = 5%.

Calculate the future value of the following single amounts: 1. Invested Amount = $12,000, i = 8%, n = 16. 2. Invested Amount = $16,000, i = 5%, n = 15. 3. Invested Amount = $29,000, i = 11%, n = 12...

The time value of money concept is given consideration in long-range investment decisions by ______.

What is the future value of $16.54 after two years if these funds can be invested to earn 5.5% compounded annually?

Explain why it is necessary to understand the time value of money.

Determine whether the following statement is true or false: Since individuals are always confronted with opportunities to earn positive rates of return on their funds, the timing of cash flows does...

A deposit of $350 earns the following interest rates: (a) 8 percent in the first year, (b) 7 percent in the second year, and (c) 5 percent in the third year. What would be the third year future val...

In determining the future value of a single amount, one measure: A. the present value of an amount discounted at a given interest rate. B. the present value of periodic payments at a given interest...

How much would be in your savings account in eight years after depositing $150 today, if the bank pays 7 percent per year? Recalculate the savings account balance, using a 6 percent interest rate,...

You have money in a savings account at an APR of 4% compounded quarterly. How long will it take for your money to triple?

You want to be a millionaire when you retire in 40 years. How much do you have to save each month if you wait 10 years before you begin your deposits? Assume an 11% annual return.

Jane Bauer has won the lottery and has the following four options for receiving her winnings: 1. Receive $100,000 at the beginning of the current year 2. Receive $108,000 at the end of the year 3....

You are analyzing the value of an investment by calculating the present value of its expected cash flows. Which of the following would cause the investment to look better? a. The discount rate decr...

Which of the following statements is true regarding the time value of money? a. Compound interest will produce equal amounts of interest each period on a fixed deposit. b. Earning simple interest i...

What is the future value in five years of $1,500 invested in an account with an annual percentage rate of 10 percent, compounded semiannually?

What is the future value in five years of $1,500 invested in an account with an annual percentage rate of 10 percent, compounded continuously?

What is the future value in five years of $1,500 invested in an account with an annual percentage rate of 10 percent, compounded monthly?

Assume that one year from now, you will deposit $1000 into a savings account that pays 8 percent. A. If the bank compounds interest annually, how much will you have in your account four years from...

What is the future value in five years of $1,500 invested in an account with an annual percentage rate of 10 percent, compounded annually?

The Garden Shoppe has adopted a policy of increasing its annual dividend at a constant rate of 1.70 percent annually. The company just paid its annual dividend of $1.14. What will the dividend be...

What is the future value of $7,000 deposited for two years earning 8% interest rate annually? a. $1,165. b. $8,165. c. $7,000. d. $15,165.

What is the future value of $3,000 deposited for three years earning 7% interest rate annually? a. 675. b. 3000. c. 6675. d. 3675.

How would an increase in the interest rate or a decrease in the holding period affect the future value of a sum of money?

What will a deposit of $4,500 left in the bank be worth if left for 5 years at 8% interest?

Calculate the future value of $100,000 ten years from now based on the following annual interests: a) 2% b) 5% c) 8% d) 10%

What will be the future value of the following investment? $1,000 invested for 9 years at 7% interest compounded annually

How much can you borrow to buy a house if you agree to pay $1500 per month for 30 years at a 4.5% annual interest rate? What is your total payment at the end?

A real estate investment has the following expected cash flows: Year 1 - $10,000 Year 2 - $25,000 Year 3 - $15,500 The discount rate is 10%. What is the investment's value at year 5? A) $18,106.69...

If you put $10,000 in an investment that returns 14% compounded monthly, what would you have after 12 years (rounded to the nearest $10)?

Assume a company makes a $2,500 deposit in its money market account. If this account is currently paying 0.7% (yes, less than 1%), what will the account balance be after 1 year?

Find the future value of $1,000 invested to earn 10% annually 5 years from now.

How long does it take for a number or an amount to triple itself if it grows at 6.5% annually? a. 17.45 years b. 15.51 years c. 16.04 years d. 19.07 years

Today, you earn a salary of $36,000. What will be your annual salary twelve years from now if you earn annual raises of 3.6 percent? a. $58,980.25 b. $51,604.12 c. $55,032.54 d. $57,414.06

Suppose you need $10,000 in 4 years to buy a car. If you can earn 5% compounded annually, how much do you need to invest today? a. $8219.27 b. $9121.45 c. $8333.33 d. $9523.80 e. None of the above.

What is the future value of $50,000 invested for 3 years at 8% interest?

What is the future value of $82,000 invested for 25 years at 12% Interest?

What is the future value of $12,000 invested for 9 years at 3% interest?

Adriana wants to provide income for her parents for 10 years should she die, Adriana earns $80,000 and feels that her parents could live on 60% of her current income. If the insurance funds could b...

Find the future value of $10 received today and deposited for 2 years at 5%.

Calculate the future value of $1,660 invested at 7.3% for four years. a. 2,420 b. 1,540 c. 2,200 d. 1,760

A basic present value concept is that cash received in the future is worth more value than the same amount of cash received today. True or False?

Your coin collection contains fifty 1952 silver dollars. If your grandparents purchased them at their face value when they were new, how much will your collection be worth when you retire in 2060,...

What is the future value at the end of year 30 of $10,000 deposited today into an account that pays interest of 3.5% p.a., but with monthly compounding?

What is the future value of $100 invested at 5% for 6 years?

Calculate the future value of the following single amounts. Sr. No. Initial Investment Annual Rate Interest Compounded Period Invested Future Value a $8,000 10% Annually 7 years b $6,000 12% Semian...

Find the interest rate if borrowed $10,000 and promise to pay $201,229 after 10 years.

Find the future value of an income stream of $6000 per year, deposited into an account paying 2% interest per year, compounded continuously, over a 5-year period. Round your answer to two decimal p...

What is the future value of a lump sum of $3,000 deposited today for 8 years at a rate of 10 percent compounded annually? Round the answer to the nearest whole value.

An investor deposits Rs.100,000 today in a bank and the bank offers a 5% interest rate per annum compounded quarterly. What will be the amount after 10 years?

Your father gave you a gift of $20,000 for good behavior and you wanted to invest in the stock market. How much will your investment grow in five years, assuming that you earned 8% each and every y...

Largo Freightlines is planning to build a new garage in three (3) years to have more space for repairing its trucks. The garage will cost $400,000. What lump-sum amount should the company invest no...

Determine the Future Worth (FW) of the following engineering project when the MARR is 15% per year. Is the project acceptable? Investment costs: $10,000; Expected life: 5 years; Market(salvage) val...

You deposit $30,000 at the end of each of the next years into your bank. How much money will you have 5 years later, assuming your bank account pays 5 percent interest?

Annsley deposits $1,000 today into a savings account that pays 3% annual interest. How much will she have in 15 years with annual compounding?

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?

Find the following values for a lump sum: * The future value of $400 invested at 7 percent for one year * The future value of $400 invested at 7 percent for five years * The present value of $400...

How much will $1,000, deposited in a savings account earning a compound annual interest rate of 6%, be worth at the end of 3 years?

How much will $1,000, deposited in a savings account earning a compound annual interest rate of 6%, be worth at the end of 10 years?

The flexible-budget variance for materials is $7,000 (U). The sales-volume variance is $17,000 (U). The price variance for material is $36,000 (F). The efficiency variance for direct manufacturing...

Calculate the RATE given the following characteristics: (a) PV $24,325 (b) FV $54,000 (c) NPER 15

To what amount will the following investment accumulate? $8,000 invested for 7 years at 8 percent compounded annually

To what amount will the following investment accumulate? $5,000 invested for 10 years at 10 percent compounded annually

How much will be in an account 4 years from now if we put $2,000 in year 1 and increase our deposit by 5% each year? Assume an 8% interest rate.

How much will a $1,000 deposit today that earns 2% annual compound interest grow to in 7 years?

If you put $10,000 in an investment that returns 14 percent compounded monthly what would you have after 12 years (round to nearest $10)? A) $11,490 B) $53,140 C) $48,180 D) $61,270

What will be the amount accumulated by the following investment? $5,635 in 10 years at 5% compounded semiannually

What will be the amount accumulated by the following investment? $7,500 in 15 years at 6% compounded quarterly

Elaine Romberg prepares her own income tax return each year. A tax preparer would charge her $60 for this service. Over a period of 10 years, how much does Elaine gain from preparing her own tax re...

Hope Dearborn invests $40,000 on January 1, 2007 in a savings account that earns interest of 8% compounded semiannually. What will be the amount in the fund on December 31, 2012?

If you purchased a $10,000 certificate of deposit (CD) today with a nominal annual interest rate of 12%, with monthly compounding, what would be the CD worth when it matures in 6 years? A. $20,471...

Find the following value for a lump sum assuming quarterly compounding: The future value of $500 invested at 8 percent for one year

Find the following values for a lump sum assuming quarterly compounding: The future value of $500 invested for five years

How much interest is earned in an account by the end of 5 years if $32,000 is deposited and interest is 3.5% per year, compounded semi-annually?

What is the balance in an account at the end of 9 years if $7,500 is deposited today and the account earns 2% interest compounded annually?

Explain the process of calculating the future value of a stream of cash flows.

What is the future value at the end of 17 years of depositing $1,750 into a mutual fund today, assuming the fund is expected to earn 12% a year?

What is the future value of $1,400 in 20 years assuming an interest rate of 9.6 percent, compounded semiannually?

Calculate how much you would have in a savings account 5 years from now if you invest $1,000 today, given that the interest paid is 8 percent compounded quarterly.

Calculate how much you would have in a savings account 5 years from now if you invest $1,000 today, given that the interest paid is 8 percent compounded semiannually.

Calculate how much you would have in a savings account 5 years from now if you invest $1,000 today, given that the interest paid is 8 percent compounded annually.

Compute the future value of an initial $2,000 compounded annually for 10 years at 10 percent.

Compute the future values of an initial $2,000 compounded annually for 10 years at 8 percent.

Mary Czech is considering the purchase of stock X at the beginning of the year. The dividend at year-end is expected to be $3.25, and the market price by the end of the year is expected to be $25....

Suppose that $2,000 is invested at a rate of 4.2%, compounded quarterly. Assuming that no withdrawals are made, find the total amount after 3 years.

You want to invest in a stock that pays $3.50 annual cash dividends for the next ten years. At the end of the ten years, you will sell the stock for $22.50. If you want to earn 12.5% on this invest...

In a stream of past dividends, the initial dividend is $0.75 and the most recent dividend is $1.75. The number of years between these two dividends (n) is 8 years. What is the average growth rate d...

Given the following cash flows, what is the future value at year ten when compounded at an interest rate of 15%? Year 0 1 5 10 Cash Flow $4,000 $3,000 $2,000 $1,000

Anna Cavanaugh loaned her friend Jason $1,000 for 6 months at 6% simple interest. What is the future value of the loan and how much finance charge will Jason pay?

Upon graduating from college, you make an annual salary of $76,833. You set a goal to double it in the future. If your salary increases at an average annual rate of 4.33%, how long will it take to...

To what amount will the following investment accumulate? $12,840, invested today for 24 years at 11.79%, compounded monthly.

At what annual rate would the following have to be invested? $2,626, to grow to $91,242, in 26 years.

a. What effect would a decrease in the interest rate have on the future value of a deposit? b. What effect would an increase in the holding period have on future value?

Gerald has decided to save for a trip in two years. If the monthly interest rate is 1.5% and he saves $2,500/month, how much will he have saved after 2 years?

Toadies, Inc., has identified an investment project with the following cash flows. Year Cash flow 1 $1,375 2 1,495 3 1,580 4 1,630 a. If the discount rate is 8 percent, what is the future value of...

Your aunt places $13,000 into an account earning an interest rate of 7% per year. After 5 years the account will be valued at $18,233.17. Which of the following statements is correct? a. The princi...

An ATM with a service fee of $2 is used by a person 200 times a year. What would be the future value in 6 years (using a 3% rate) of the annual amount paid in ATM fees?

What is the future value of $100 after 3 years under (a.) 10% annual compounding? (b.) 10% semiannual compounding? (c.) 10% quarterly compounding? (d.) 10% monthly compounding? (e.) 10% daily compo...

If you want an investment to double in 6 years, what interest rate must it earn?

You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of 2.2% per year, compounded monthly for the first six months, increasing thereafter to 17.1% c...

a. If today is Year 0, what is the future value of the following cash flows five years from now? b. What is the future value 10 years from now? Assume a discount rate of 9 percent per year. Year Ca...

How much would $100, growing at 5% per year, be worth after 20 years? a. $254.72 b. $286.56 c. $265.33 d. $281.25 e. $331.66

The City of San Antonio is considering various options for providing water in its 50-year plan, including desalting. One brackish aquifer is expected to yield desalted water that will generate reve...

You want to buy a new ski boat 2 years from now, and you plan to save $7,000 per year, beginning one year from today. You will deposit your savings in an account that pays 2.0% interest. How much...

Solve for the unknown interest rate given the following information: | Present Value | Years | Interest Rate | Future Value | $920 | 6 | ____ | $1,748

For each of the following compute the future value: Present Value Years Interest Rate Future Value $3,150 6 18% a $8,453 19 6% b $89,305 13 11% c $227,382 29 5% d

Which of the following will result in a future value greater than $100? A) PV = $50, r = an annual interest rate of 10%, and n = 8 years B) PV = $75, r = an annual interest rate of 12%, and n = 3 y...

Assume $20 million was invested today to provide for pension payments for a group of employees. Assume also that the average return on these funds was 8.5% a. How big will the fund be in 25 years?...

Firm H has the opportunity to engage in a transaction that will generate $100,000 of cash flow (and taxable income) in year 0. How does the net present value of the transaction change if the firm c...

Calculate the future value FV of an investment of $10,000 at the stated interest rate after the stated amount of time. 7.5% per year, compounded daily (assume 365 days/year), after 12 years

Which one of the following will increase the future value of a lump sum invested today? A. decreasing the amount of the lump sum B. increasing the rate of interest C. paying simple interest rather...