Exam 3: Time Value of Money - Introduction

In 1958 the average tuition for one year at an Ivy League school was $1,800.Thirty years later,in 1988,the average cost was $13,700.What was the growth rate in tuition over the 30-year period?

You deposit $100 in a bank for a fixed 7 year term.Interest on the deposit is calculated every half-year (m = 2)at the rate of 5% per half-year (i/m = 5%).Because the term is fixed,you are not allowed to withdraw interest at any point.You earn interest in the final compounding period of the term.How much of that interest is earned off of earlier interest (as opposed to earned off of the principal)?

The table shows a series of deposits at different dates into a savings account.If the account pays 10.5% interest (compounded annually),what is their future value at year 6?

Henry purchased stock in Nortel Networks for $120 per share.Unfortunately the stock did not perform very well in the 3 years that Henry has owned it as it is now trading at $3.93 per share.Feeling that the value of the stock will only continue to drop,Henry sold his shares today.What annual rate of return did Henry make on his investment?

At 15% interest compounded annually,approximately how long will it take Walter to double his money?