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Calculate the future value of $2000 in

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1);Calculate the future value of $2000 in;a) 5 years at interest rate of 5% per year;b) 10 years at an interest rate of 5% per year;c) 5 years at an interest rate of 10% per year;d) why is the amount of interest earned in part (a) less than half the amount of interest earned in (b);2);You are thinking of retiring. Your retirement plan will either pay you $250000 immediately on retirement or $350000 five years after;date of retirement. Which alternative should you choose if interest rate is;0% per year;8% per year;20% per year;3);you have been offered a unique investment opportunity. If you invest $10,000 today you will receive $500 one year from now, $1500 two years from now and $10,000 ten years from now;what is the NPV of the opportunity if the interest rate is 6% per year? Should you take the opportunity?;what is the NPV of the opportunity if the interest rate is 2% per year? Should you take the opportunity?;4);What is the present value of $1000 paid at the end of each of the next 100 years if interest rate is 7% per year?;5);you have found 3 investment choices for a one year deposit;****10% APR compounded monthly;****10% APR compounded annually;****9% APR compounded daily;Compute the EAR for each investment with 365 days in the year;6)Key Bank is offering a 30 year mortgage with an EAR of 5 and 3/8%. If I borrow $ 150,000 what will be my monthly payment?;7);if the rate of inflation is 5% what nominal interest rate is necessary for you to earn a 3% real interest rate on your investment;8) your best taxable investment has an EAR of 4%. Your best tax-free investment opportunity has an EAR of 3%.;If your tax rate is 30%, which opportunity provides the higher after-tax interest rate?

 

Paper#27314 | Written in 18-Jul-2015

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