# Time value of money practice questions.xlsx - 1 Megan wants...

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12345At an interest rate of 10% it is better to have \$100 today than \$200 in 7 years.6Megan wants to buy a designer handbag and plans to earn the money from babysittiinterest rate is 7% and she is willing to wait one year to purchase the bag. How muchwill she need to earn today to buy the bag for \$550 one year from now? (Enter just twithout the \$ sign or a comma and round off decimals to the closest integer, i.e., routo \$30 and rounding \$30.50 up to \$31.)Johnny and Darren both earn \$250 working on their respective neighbors' big farms.\$250 in the piggy bank that his parents gave him to encourage him to save. Darren psavings account his parents set up for him. The savings account pays 6% interest. Themoney out after 6 years. How much more money does Darren have than Johnny?Your dad invested \$40 for you in 1951 in a fund and you have not withdrawn any mohas averaged a return of 8% over the last 67 years, what is the current value of that ijust the number in dollars without the \$ sign or a comma and round off decimals to ti.e., rounding \$30.49 down to \$30 and rounding \$30.50 up to \$31.)Rondo is in the market for a new car. He has narrowed his search down to 2 models.\$33,000 and Model B costs \$28,000. With both cars he plans to pay cash and own thbefore trading in for a new car. His research indicates that the trade in value for Mod56% of the initial purchase price, while the trade in value for Model B is 45%. The intsimplicity assume that operating and maintenance costs for the models are identicalbetter decision and how much "cheaper" is it than the alternative?Shawn wants to buy a new telescope. He estimates that it will take him one year to sthat the telescope will cost \$300. At an interest rate of 5%, how much does Shawn ntoday to purchase the telescope in one year? (Enter just the number in dollars withocomma and round off decimals to the closest integer, i.e., rounding \$30.49 down to \$\$30.50 up to \$31.)Jeff has \$1,100 that he invests in a safe financial instrument expected to return 4% a\$550 and invests in a more risky venture that is expected to return 8% annually. Whoyears? And how much does he/she have in FV terms?789Don has just received a cash gift of \$70,000 from his rich eccentric uncle. He wants to

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Term
Spring
Professor
professor_unknown
Tags
Johnny, Darren, Dominique