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FIN534 Week 3 Problems

FIN534 Week 3 Problems - the opportunity to earn more...

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Week 3: Working Capital Management Chapter 3 Problems Problem 3: Calculate the future Valve of $2,000 in A Five years at an interest of 5% NPER Rate PV PMT FV Amount of Interest Given 5 5.00% -5,000 0 $6,381.41 $1,381.41 B Ten years at an interest rate of 5% NPER Rate PV PMT FV Amount of Interest Given 10 5.00% -5,000 0 $8,144.47 $3,144.47 C Five years at an Interest rate of 10% NPER Rate PV PMT FV Amount of Interest Given 10 10.00% -5,000 0 $12,968.71 $7,968.71 D Why is the amount of interest earned in part(a) less than half the amount of interest earn In the ten year plan the interest has the opportunity to compound longer for another five years,
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Unformatted text preview: the opportunity to earn more interest over the extra five years. Problem 4: What is the present value of $10,000 received? A Twelve years from today when the interest rate is 4% per Year? NPER Rate PV PMT FV Given 12 4.00%-6,246 $10,000.00 B Twenty years from today when the interest rate is 8% per year? NPER Rate PV PMT FV Given 20 8.00%-2,145 $10,000.00 C Six years from today when the interest rate is 2% per year? NPER Rate PV PMT FV Given 6 2.00%-8,880 $10,000.00 t Earned t Earned t Earned ned in part(B)? , which will generate...
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