Problem Set-Single Dollar Problems

Problem Set-Single Dollar Problems -...

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Problem Set: Single Dollar Problems  (Solutions Below) 1. If you receive $300.00 in 10 years and the discount rate is 15%, what is  the present value? 2. If you want to buy a boat in 6 years that costs $1,000.00 and you now have  $600.00, what interest rate would you need? 3. If you put $1,000 in a stock portfolio with a return of 8%, how much would  you expect to have in 7 years? 4. How long would you need to wait for $500.00 to double if the interest rate  is 10%? 5. If you need $10,000 to pay for your first year of graduate school in 3 years  and you get an interest rate of 9%, how much must you invest today? 6. If 6 years ago you invested $500.00 and received an annual interest rate  of 4%, how much would you now have? 7. You borrowed $100 from a friend, who said you need to pay back $300 in  5 years, what rate are you being charged? 8. How many years would it take you to have $2,500.00 if you invested  $500.00 today at 15%? 9. To have $6000 in 7 years what interest rate would you need if you now had  $5,500? 10.  If you win a lottery worth $1,000,000 payable in 15 years and the interest  rate is 8%, what is this worth today? 11.   How long does it take for an investment to quadruple in value if the  investment yields 6% per year?
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12.  The average price of a movie ticket at the end of 1988 was $5.50 and the  average price of a movie ticket at the end of 1990 was $6.00. At what  annual rate did ticket prices grow? 13.  If I invest $100 today in an account that earns 10% per year, how much  will   I   have   in   this   account   at   the   end   of   twenty   years   if   I   make   no  withdrawals? 14.   Suppose that I am trying to borrow money from you to finance my  business,   and   I   promise   to   repay   you   $10,000   in   two   years.   If   your  opportunity cost of funds is 10%, how much are you willing to lend me? 15.
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This note was uploaded on 06/18/2011 for the course FIN 521 taught by Professor Varney during the Spring '11 term at Andrew Jackson.

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Problem Set-Single Dollar Problems -...

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