# 4.5 - BASICCONCEPT PROBLEMS TIMEVALUEOFMONEY JANUARY16,2006...

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BASIC CONCEPT  PROBLEMS TIME VALUE OF MONEY JANUARY 16, 2006

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a) FV = \$10,000 X 1.714 = \$1,714 n = 7 yrs i = 8% FV = \$17,140 a) FV = \$10,000 X 2.594 = \$25,940 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? a) FV = \$1,000 X 2.079 = \$2,079 n = 15 yrs i = 5% pv = \$1,000

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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%? a) PV = \$10,000 X 0.583 = \$5,830 n = 7 yrs i = 8% FV = \$10,000 a) PV = \$10,000 X 0.386 = \$3,860
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

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## This note was uploaded on 11/13/2011 for the course CIVE 2*** taught by Professor - during the Spring '11 term at Carleton CA.

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4.5 - BASICCONCEPT PROBLEMS TIMEVALUEOFMONEY JANUARY16,2006...

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