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4.4 - he be in 5 years from allowing you to settle the debt...

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BASIC CONCEPT PROBLEMS TIME VALUE OF MONEY January 15, 2006 1. If you invest \$10,000 today, how much will you have in: a) 7 years at 8%? b) 10 year at 10%? 2. Andrew invested \$1,000 in a mint condition Michael Jordan rookie card. He expects the card will appreciate in value at 5% per year for the next 15 years. How much will the card be worth in 15 years? 3. How much will you have to invest today to receive:: a) \$10,000 in 7 years at 8%? b) \$10,000 in 10 year at 10%? 4. You owe Mike \$10,000 at the end of 5 year: a) Mike has just told you he would accept a payment today discounted at 6%. How much would you have to pay Mike today to settle this debt? b) If Mike could reinvest the money for 5 years at 10%, how much better off would
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Unformatted text preview: he be in 5 years from allowing you to settle the debt today? 5. How much money would you have saved in 10 years if you invested \$10,000 per year at 6%? 6. How much money must you invest each year, if you need \$50,000 in 5 years and you can invest the money at 7%? 7. How much money must you invest today in order to withdraw \$10,000 per year, for 10 years, if you can invest the money at 6%? 8. You have just received a \$100,000 inheritance. If you invest the money at 7% over a 10 year period, how much can withdraw each year in equal payments so that at the end of the 10 th year( and the last payment) there will be no funds left?...
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