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Misc. Four Finance Questions




Question;1. You are offered $900?ve years from now or $150 at the end of each year for the next?ve years. If you can earn 6 percent on your funds, which offer will you accept? If you can earn 14 percent on your funds, which offer will you accept? Why are your an-swers different?2. A township expects its population of 5,000 to grow annually at the rate of 5 percent. The township currently spends $300 per inhabitant, but, as the result of in?ation and wage increments, expects the per capita expenditure to grow annually by 7 percent. How much will the township?s budget be after 10, 15, and 20 years?3. You want $100,000 after eight years in order to start a business. Currently you have $26,000, which may be invested to earn 7 percent annually. How much additional money must you set aside each year if these funds also earn 7 percent in order to meet your goal of $100,000 at the end of eight years? By how much would your answer differ if you invested the additional funds at the beginning of each year instead of at the end of each year?4. Which is the better choice when purchasing a $30,000 car: a) a four-year loan at 6 percent, b) an immediate rebate of $2,000 and a four-year loan at 8 percent?


Paper#48483 | Written in 18-Jul-2015

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