Chapter 2 Problem Set #1
What will $5,000 be worth in 10 years if it earns 12% per year?
What is the present value of $25,000 received in 15 years if the discount rate is 9%?
How many years will it take $20,000 to grow to $40,000 if it earns 12%?
At what annual rate would $1,000 have to earn to equal $3,000 in 10 years?
What is the future value of $500 per month received at the end of each month for 12
years if your account earns 8% annually, compounded monthly?
What is the present value of $1,000 received at the beginning of each month for 15 years
if the discount rate is 10%?
What is the future value of $3,000 invested at the beginning of each year for 40 years at
What is the present value of $1,000 received in 1 year, $2,000 received in 2 years,
$5,000 received in 3 years, and $10,000 received in 5 years at a discount rate of 8%?
What is the monthly mortgage payment on a 30-year $200,000 home loan at 8%?
How much will you have to invest at the beginning of each quarter at 10% in order to
have $20,000 in 5 years?
What is the effective annual interest rate on a credit card with a nominal rate of 18%?
Suppose your monthly car payment is $280.00, your interest rate is 9.5%, and you
financed your car for 5 years. How much did you borrow?
How much would you need to invest at the beginning of each month for the next 40 years
at 10% to accumulate $1,000,000?
You loan a friend $40,000 which will be repaid in 5 equal end of year payments of
$10,000 each. What rate of return does your loan receive?