225Time Value of Money

225Time Value of Money - 3 years. What are you looking for...

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Time Value of Money 1. If you save $5,000 per year for 5 years at 8%, how much will you have after 5 years? What are you looking for = What do you know x CF FV = A x CF = 5,000 x (5.8666) = 29,333 2. You need $30,000 for a down payment on a house in 3 years. The most you can get in this economy is 3%. How much must you invest today to have $30,000 in
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Unformatted text preview: 3 years. What are you looking for = What do you know x CF PV = FV x CF = 30,000 x (.91514) = 27,454.20 3. You have $50,000 to invest today in an investment that pays 6% for 5 years. How much will you have after 5 years? What are you looking for = What do you know x CF FV = PV x CF = 50,000 x 1.33823 = 66,911.5...
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