Time Value of Money

Time Value of Money Exercises 1. What is the balance in an enthronement account at the difference of 10 years if $5,000 is invested now off and the account understands 8% interest compounded yearly? What would the encourage be after 50 years? later vitamin C years? 2. What is the present value of the following emerging amounts: next ValueDiscount rateNumber of periods $15,0006%5 $37,0009%10 $596,00011%4 $1,178,0009.5%12 3. dep terminal the present value of the following silver inflows assumptive an 11% discount rate. Yearcash flow 117,000 217,000 317,000 417,000 517,000 6100,000 4. knock all over the following cardinal mutually exclusive projects YearCash Flow see to it 1Cash Flow confound 2 0-150,000-150,000 1$40,000$100,000 2$90,000$80,000 3$120,000$60,000 a) Calculate the ingest in present value (NPV) of individually project assuming an 8% discount rate. b) Calculate the Internal Rate of cave in (IRR) for each project. 5. Anne Jones checked her lottery ticket once again. The numbers racket matched; she had win the $10,000,000 marvelous prize.

The lottery provided two plectrums for earnings of the grand prize. First, the winner could take $1,000,000 immediately, with the remainder payable in $1,000,000 instalments over ix years, starting one year from now. The alternative payment option was an immediate lump sum payment of $7,000,000. Anne believes that she place earn! a rate of return of 7 per cent on any money she receives. a) Which payment option would you point that Anne allot? b) What Interest rate would make these two options kindred? 6. You be intentionning to establish a retirement savings object by setting aside money at the draw off of each year. It is your hope to retire at age 55 with a pension income of $100,000 per year received at the end of each year, for 20 years, from the...If you want to get a just now essay, order it on our website: BestEssayCheap.com

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