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Tim Gillespie Week 4 Homework

Tim Gillespie Week 4 Homework - Tim Gillespie Week 4...

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Tim Gillespie Week 4 Chapter 9 Problems 2,4 and 9 Annual Interest Rate Term in Years Payment PV #2 a. 8.00% 7 \$9,000.00 \$5,251.41 b. 10.00% 5 \$20,000.00 \$12,418.43 c. 6.00% 25 \$10,000.00 \$2,329.99 d. 16.00% 50 \$1,000.00 \$0.60 Annual Interest Rate Term in Years Present Value FV #4 a. 9.00% 2 \$9,000.00 \$10,692.90 b. 12.00% 7 \$9,000.00 \$19,896.13 c. 14.00% 25 \$9,000.00 \$238,157.24 d. 14.00% 25 \$9,000.00 \$265,113.23 Annual Interest Rate Term in Years Investment Future Value #9 a. 6.00% 5 \$2,000.00 \$11,274.19 b. 10.00% 20 \$2,000.00 \$114,550.00 c 12.00% 40 \$2,000.00 \$1,534,182.84 While working on this problem, I noticed right away that I would love to put 60 cents into the bank today just to have \$1000 in 50 years. It seems like a while, but for just 60 cents it would be worth it. All of these PV's depend on the length of the term and interest rates. The longer you leave money in the bank the more interset you accrue, so the present values are much lower for the longer term. Figuring out the future values on these definitely caught my eye. As the terms become longer, the interest rates seem to be higher. If the present values are all at \$9000, the longer it stays in the bank the more you would have. I would prefer to leave it in for 25 years with interest compounded semi-annually.

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Tim Gillespie Week 4 Homework - Tim Gillespie Week 4...

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