BUSN380 Week 1 TCO 1 Problem Set 1 - Time Value of Money Relationships &amp; Applications; Opportuni

# BUSN380 Week 1 TCO 1 Problem Set 1 - Time Value of Money Relationships & Applications; Opportuni

This preview shows pages 1–2. Sign up to view the full content.

BUSN380 Week I Assignment – Problem Set 1 TCO 1 Time value of money relationships & applications; opportunity costs; personal financial statements - Problem Set 1 (Note: Some of these problems require the use of the time value of money tables in the Chapter 1 Appendix, pp. 36-39). 1. Ben Collins plans to buy a house for \$65,000. If that real estate property is expected to increase in value 5 percent each year, what would its approximate value be seven years from now? Ans. \$65,000 × 1.407 = \$91,455 2. At an annual interest rate of five percent, how long would it take for your savings to double? Ans. About 14.4 years (72 / 5) 3. In the mid-1990s, selected automobiles had an average cost of \$12,000. The average cost of those same motor vehicles is now \$20,000. What was the rate of increase for this item between the two time periods? Ans. (\$20000 - \$12,000) / \$12,000 = .667 (67 percent) 4. A family spends \$28,000 a year for living expenses. If prices increase by 4 percent a year for the next three years, what amount will the family need for its living

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 05/27/2011 for the course BUSN 380 taught by Professor Bloch during the Fall '10 term at DeVry NY.

### Page1 / 3

BUSN380 Week 1 TCO 1 Problem Set 1 - Time Value of Money Relationships & Applications; Opportuni

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online