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

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At an interest rate of 10% it is better to have $100 today than $200 in 7 years.
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Megan wants to buy a designer handbag and plans to earn the money from babysitti
interest rate is 7% and she is willing to wait one year to purchase the bag. How much
will she need to earn today to buy the bag for $550 one year from now? (Enter just t
without the $ sign or a comma and round off decimals to the closest integer, i.e., rou
to $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 p
savings account his parents set up for him. The savings account pays 6% interest. The
money 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Your dad invested $40 for you in 1951 in a fund and you have not withdrawn any mo
has averaged a return of 8% over the last 67 years, what is the current value of that i
just the number in dollars without the $ sign or a comma and round off decimals to t
i.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 th
before trading in for a new car. His research indicates that the trade in value for Mod
56% of the initial purchase price, while the trade in value for Model B is 45%. The int
simplicity assume that operating and maintenance costs for the models are identical
better 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 s
that the telescope will cost $300. At an interest rate of 5%, how much does Shawn n
today to purchase the telescope in one year? (Enter just the number in dollars witho
comma 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. Who
years? And how much does he/she have in FV terms?
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Don has just received a cash gift of $70,000 from his rich eccentric uncle. He wants to