# TVM_problems - Finance 254 Additional Time Value of Money...

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Finance 254 Additional Time Value of Money Problems If I sell one of my kidneys for \$5000 and deposit the proceeds in an account earning 7.25% per year, what amount will I have available in 7 years? That guy from N'Sync, Lance Something, wants to go to space. The Russian space program decides that, while they don't have any seats available on flights in the near future, they would be willing to send him flying into the center of the sun on a rocket they are currently building. The price is a bargain at \$5M. Furthermore, the fee isn't due until he embarks on his voyage in 5 years. If Lance can earn a staggering 100% on his investments, how much does he need to save today? Mr.Frump is offered two investments and must decide which pays a higher interest rate: (A) Deposit \$500 now and receive \$1000 in 6 years. (B) Deposit \$250 now and receive 10 annual payments of \$45. Give Mr.Frump a hand and help him figure out the better option. Going to Spain:

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## This note was uploaded on 09/19/2009 for the course FIN FIN 221 taught by Professor Fin221 during the Fall '09 term at University of Illinois, Urbana Champaign.

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TVM_problems - Finance 254 Additional Time Value of Money...

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