Value of money | Business & Finance homework help


You lapse a compact for $25,000 which you pur-pose to delay until it matures in 5 years. It pays 2% plain share per year. How greatly share accomplish you merit on your siege if you delay it as pur-posened.

 

2.       To amend your meritings from the siege in interrogation #1 you endow each year’s share (which is compensated at the end of the year) in a capital communicate enduement that pays 1.5% mixture share per year. You do this until the compact matures in the BEGINNING of year 10. What accomplish you merit if you do this?

 

3.       Your steadfast must supply its donation barter so you lapse one for $42,500. You finance it for 5 years at 2.95% per year and establish correspondent monthly payments each month for the 5 years (60 months). Assuming you finance the complete sum how greatly accomplish you bear compensated for the barter?

 

4.       When shopping to supply the donation barter in the definite interrogation you root a competing trafficker who offered this choice: Non-interference A. Get $3000 “cash end,” then pay the poise in 5 annual payments at 2.5%; Non-interference B. Pay the liberal compensation in 5 annual installments at no (0%) share. Which is the melioreprove communicate, that is, below which communicate accomplish you pay less? How greatly over or hither does the melioreprove non-interference consume compared to the confutation in interrogation 3 once all payments are made?

 

5.       Your steadfast lapses a behalf of gear for $515,000. Historically, nearby gear in the vicinity has appreciated in reprove about 1.5% per year. Assuming you can depend on this narrative perception what accomplish the gear be price at the end of 20 years?

 

6.       In doing some seclusion pur-posening you rooted that you absence to preserve $25,000 each year until you depart. You pur-pose to endow it in a “guaranteed restore interchangeable enduement” which pays compound share at 3% per year; you pur-pose to adhere-to it endowed there until you depart in 30 years. What accomplish the siege be price then?

 

7.       Your steadfast must supply its packaging tool aftercited its beneficial vivacity of 10 years passes and diminution can no hankerer be claimed on it. The estimated supplyment consume is $5,550,123. How greatly must the audience preserve/endow each year at 2% to muster ample to supply the tool?

 

8.       If the share reprove increased to 5% and the steadfast from interrogation 7 rooted it could merely endow $235,000 per year, how hanker would it admit to muster $5,550,123 to supply its packaging tool? If they needed to get this effected amid a 10-year period, could they do it below these requisite?

 

9.       You are offered two sieges for the steadfast’s “retained meritings” ($4,238,000). You are looking for cheerful ways to endow the steadfast’s stubborn merited capital. Which non-interference accomplish grant you a melioreprove restore on and of siege (two ROIs)?

·         Option A- which pays out at 4% plain share for five years

·         Option B- which pays out at 2% mixture share for disgusting years

 

10.   Increasing the enumerate of periods could impact all of the aftercited except

a.       Present reprove of an annuity

b.      Present reprove of $1

c.       Future reprove of an annuity

d.      Future reprove of $1