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EX3_Time_Value_of_Money

# EX3_Time_Value_of_Money - Julian Riano FIN 330 Oct 10 07 Q1...

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Page 1 Julian Riano ---- FIN 330---- Oct. 10 / 07 Q1. What is the future value at the end of year 6 of a 6-year annuity of \$1,000 per year if the discount rate is 10%? \$7,715.61 \$7,715.61 Q2. What is the present value of an annuity of \$350 per year for each of the next 7 years if the discount rate is 10% per year? PV = \$1,703.95 \$1,703.95 Q3. What are the monthly payments on a 3-year \$5,000 loan if the interest rate is 1% per month? PMT = \$166.07 \$166.07 Q4. What is the present value of a stream of \$1,500 payments received at the beginning of each of years 3 through 9 if the discount rate is 10% per year? PV = \$6,638.75 \$6,638.75 10% Q5. You expect to receive the following future cash flows at the end of the years indicated: \$500 in year 2, \$1,200 in year 4, \$800 in year 5 and \$1,500 in year 6. If the discount rate is 7% per year; a. What is the present value of all four expected future cash flows? b. What is the value of the four cash flows at year 5? c. What is the value of the four cash flows at year 10? 0 PV = \$2,922.10 \$2,922.10 500 \$4,098.39 \$4,098.39 0 \$5,748.20 \$5,748.20 1200 800 1500 Q6. You expect to receive \$2,000 in 3 years from today. If the present value of this FV 6 = FV 5 = FV 10 =

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Page 2 amount is \$1,423.56, what is the annual discount rate? R = 12% 12% -1423.56 0 0 Click on Sheet2 and continue the work. 2000
Page 3 0 0 0 0 1 1500 1126.97 2 1500 1024.52 3 1500 931.38 4 1500 846.71 5 1500 769.74 6 1500 699.76 7 1500 636.15 8 9

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Sheet2 Page 5 Age Contribution of A

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EX3_Time_Value_of_Money - Julian Riano FIN 330 Oct 10 07 Q1...

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