HI, could anyone help with this please. :)
2. Find the following values:
a) An intial $500 compounded for 10 years at 6 percent
b) An intial $500 compounded for 10 years at 12 percent
c) The present value of $500 due in 10 years at a 6 % discount rate.
d) The present value of $1, 552.90 due in 10 years at a 12 % discount rate and at a 6% rate. Give a verbal definition of the term present value, and illustrate it using a time line with data from this problem. As a part of your answer, explain why present values are dependent upon interest rates.
3. To the closest year, how long will it take $200 to double if it is deposited and earns the following rates?
a) 7%
b) 10%
c) 18%
d) 100%
4. Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1; that is, they are ordinary annuities.
a) $400 per year for 10 years at 10%
b) $200 per year for 5 years at 5 %
c) $400 per year for 5 years at 0 %
d) Now rework parts a, b, c assuming that payments are made at the beginning of each year; that is, they are annuities due.
5. Find the present value of the following ordinary annuities:
a) $400 per year for 10 years at 10%
b) $200 per year for 5 years at 5%
c) $400 per year for 5 years at 0%
d) Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
14. Washington-Pacific invests $4 million to clear a tract of land and to set out some young pine trees. The trees will mature in 10 years, at which time Washington-Pacific plans to sell the forest at an expected price of $8 million. What is Washington-Pacific’s expected rate of return?
18. You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 per year, with the first payment being made a year from today, in a bank accountant that pays 12% annual interest. Your last deposit will be less than $1,250 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal, and how large will the last deposit be?
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