Chapter 5 Homework

# Chapter 5 Homework - Chapter 5 Homework Finance 302 5-5...

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Unformatted text preview: Chapter 5 Homework Finance 302 5-5 TIME TO REACH A FINANCIAL GOAL You have \$42,180.53 in a brokerage account, and you plan to deposit an additional \$5,000 at the end of every future year until your account totals \$250,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal? 5-7 PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay \$100 at the end of each of the next 3 years, \$200 at the end of Year 4, \$300 at the end of Year 5, and \$500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Its future value? 5-12 EFFECTIVE RATE OF INTEREST Find the interest rates earned on each of the following: a. You borrow \$700 and promise to pay back \$749 at the end of 1 year. b. You lend \$700 and the borrower promises to pay you 749 at the end of 1 year. c. You borrow \$85,000 and promise to pay back \$201,229 at the end of 10 years. d. You borrow \$9,000 and promise to make payments of \$2,684.80 at the end of each year for 5 years. 5-14 FUTURE VALUE OF AN ANNUITY Find the future values of these ordinary annuities. Compounding occurs once a year. a. \$400 per year for 10 years at 10% b. \$200 per year for 5 years at 5% c. \$400 per year for 5 years at 0% d. Rework parts a, b, and c assuming they are annuities due . 5-15 FUTURE VALUE OF AN ANNUITY Find the present values of these ordinary annuities . Discounting occurs once a year. a. \$400 per year for 10 years at 10% b. \$200 per year for 5 years at 5% c. \$400 per year for 5 years at 0% d. Rework parts a, b, and c assuming they are annuities due ....
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## This note was uploaded on 10/17/2011 for the course FINC 302 taught by Professor Lawrence during the Spring '11 term at Nicholls State.

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Chapter 5 Homework - Chapter 5 Homework Finance 302 5-5...

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