Suppose you buy a big-screen TV with $1,000 down and $500 per year for the next two years. If the interest rate is fixed at 5%, what is the present value of the TV?
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- What is the present value of $100 one year from now if the interest rate is 10%? What is the present value if the interest rate is 5%? Which one do you like: to have it today or wait for 1 year in the future. Why do you like it today/in 1 year?The market for a product is expected to increase at an annual rate of 6%. First-year sales are estimated at $45,000, the horizon is 12 years, and the interest rate is 8%. What is the present value?A lottery claims its grand prize is $20 million, payable over four years at $4,000,000 per year. If the first payment is made immediately, and the next 4 payments at the end of year 1, year 2, year 3 and year 4, what is this grand prize really worth? Use an interest rate of 8%.
- Suppose Crystal Wilson wants to accumulate $1,000,000 by the time she retires in 40 years. If she earns 10% on her investments, how much must she invest each year in order to realize her goal?14. When you complete your MBA, you will treat yourself to a new car. The car you want to buy costs $25,000 and you have enough to put 20% down in cash. You can take out a loan for the rest of the cost of the car. Calculate your monthly car payments assuming the auto finance department states that the annual interest rate on the car loan is 8% and you pay the loan over a 3-year period.The present value of a series of $5 at the end of every 5 years, forever, is equal to $20. i. Calculate the effective rate of interest. ii. What is the accumulated value of $9400 invested for 10 years after a 6% discount is paid at the beginning of the investment period? Please i need answer for only subpart ii
- Every year you pay your neighbor $150 to clean the gutters at your house. You saw an ad on late night TV for a new product--GutterSnipe--which sits in the gutters and prevents leaves getting in. Your interest rate is 8%, compounded daily, and you plan on being in the house another 10 years. You assume that any potential buyer won't be interested/notice that you have installed GutterSnipe on your house. What is the most you would be willing to pay to buy GutterSnipe for your house? $978 $965 $1010 $992You are interested in buying a piece of real estate property that could be worth $450,000 in five years. If your earning interest rate is 5%, how much would you be willing to pay for this property now?1. You borrow $20,000 from a family member and agree to pay it back in 6 months. Because you are part of the family, you are only being charged simple interest at the rate of 0.5% per month. How much will you owe after 6 months? How much is the interest?
