Exam 26: Appendix B: Time Value of Money

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment.

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years.Assuming he can earn an interest rate of 5% compounded annually,how much of his inheritance must he invest today?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 If we want to know the value of present-day assets at a future date,we can use:

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The interest rate is also called the __________________ rate.

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the building?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years.Assuming she can earn an interest rate of 6% compounded annually,how much must she invest today?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly.How much will Keisha have accumulated after 2 years?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The Masterson family is setting up a vacation fund,and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest.What amount will they have available for their vacation at the end of 2 years?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Which interest rate column would you use from a present value or future value table for 8% interest compounded quarterly?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Interest may be defined as:

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company has $46,000 today to invest in a fund that will earn 4% compounded annually.How much will the fund contain at the end of 6 years?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual rate of interest?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for her daughter.She plans to invest $7,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 9 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 9 years?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jessica received a gift of $7,500 at the time of her high school graduation.She invests it in an account that yields 10% compounded semi-annually.What will the value of Jessica's investment be at the end of 5 years?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jackson has a loan that requires a $17,000 lump sum payment at the end of four years.The interest rate on the loan is 5%,compounded annually.How much did Jackson borrow today?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company needs to have $150,000 in 5 years,and will create a fund to insure that the $150,000 will be available.If it can earn a 6% return compounded annually,how much must the company invest in the fund today to equal the $150,000 at the end of 5 years?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Cody invests $1,800 per year from his summer wages at a 4% annual interest rate.He plans to take a European vacation at the end of 4 years when he graduates from college.How much will he have available to spend on his vacation?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering investing in a project that is expected to return $350,000 four years from now.How much is the company willing to pay for this investment if the company requires a 12% return?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering an investment that will return $22,000 semiannually at the end of each semiannual period for 4 years.If the company requires an annual return of 10%,what is the maximum amount it is willing to pay for this investment?

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jason has a loan that requires a single payment of $4,000 at the end of 3 years.The loan's interest rate is 6%,compounded semiannually.How much did Jason borrow?