Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
68. General TVM Five years ago, Jane invested $5,000 and locked in an 8 percent annual
interest rate for 25 years (end 20 years from now). James can make a 20-year investment today
and lock in a 10 percent interest rate. How much money should he invest now in order to have
the same amount of money in 20 years as Jane?
69. General TVM Ten years ago, Jane invested $1,000 and locked in a 7 percent annual
interest rate for 30 years (end 20 years from now). James can made a 20-year investment today
and lock in a 6 percent interest rate. How much money should he invest now in order to have the
same amount of money in 20 years as Jane?
70. What is the future value of $600 deposited for 4 years earning an 11 percent interest rate
annually?
71. A deposit of $500 earns 5 percent the first year, 6 percent the second year and 7 percent
the third year. What would be the third year future value?
72. What is the future value of $2,500 deposited for one year earning a 14 percent interest
rate annually?
73. What is the present value of a $600 payment in one year when the discount rate is 8
percent?
74. What is the present value of a $7,000 payment made in six years when the discount rate
is 4 percent?
75. Compute the present value of $3,000 paid in four years using the following discount
rates: 3 percent in year 1, 4 percent in year 2, 5 percent in year 3, and 6 percent in year 4.
76. Compute the present value of $4,000 paid in five years using the following discount rates:
10 percent in year 1, 2 percent in year 2, 12 percent in year 3, and 9 percent in years 4 and 5.
77. Approximately how many years does it take to double a $475 investment when interest
rates are 8 percent per year?
78. Approximately what rate is needed to double an investment over five years?
79. Determine the interest rate earned on an $800 deposit when $808 is paid back in one
year.
80. Which is more valuable, receiving $775 today or receiving $885 in 2.5 years if interest
rates are 7.25 percent?
81. What would be more valuable, receiving $1,895 today or receiving $3,450 in six years if
interest rates are 8 percent?
82. What is the value in year 2 of a $200 cash flow made in year 8 if interest rates are 3
percent?
83. What is the value in year 3 of a $10,000 cash flow made in year 20 if interest rates are 5
percent?
84. What annual rate of return is earned on a $895 investment that grows to $1,976 in eight
years?
85. A stock investor deposited $3,450 six years ago. Today the account is valued at $2,180.
What annual rate of return has this investor earned?
86. How many years (and months) will it take $4 million to grow to $7 million with an annual
interest rate of 12 percent?
87. How many years (and months) will it take $1 million to grow to $3 million with an annual
interest rate of 7.5 percent?
88. Scenario A: At age 27, you invest $1,500 that earns 9 percent each year. Scenario B: At
age 40, you invest $2,500 that earns 11 percent per year. Under which scenario do you
accumulate more money by age 60?
