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# Additional_Practice_Problems_Exam_1-3 - years and the...

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Additional Practice Problems 1. If you deposit \$10,000 in a savings account paying an annual interest of 5%, what will be the value of your account in 1, 2, 5 and 20 years? Hint: Simply change your N and recomputed FV, you don’t need to reenter everything FV Year 1 = FV Year 2 = FV Year 5 = FV Year 20 = 2. If you are promised \$80,000 in 1, 2, 5 or 20 years, what will be the current value with a discount rate is 10% compounded annually? PV Year 1 = PV Year 2 = PV Year 5 = PV Year 20 = 3. You invested \$5,000 in a savings account earning 6% compounded monthly, how long will it take to grow to \$20,000 if you deposit an additional \$50 every month?

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4. You just sold an office building for 10 million dollars. You have owned it for 20
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Unformatted text preview: years and the property has appreciated at a 12% annual rate. What did you originally pay for the property? 5. What is the net present value of the following annual cash flow (if the funds are discounted at 15%)? 1 2 3 (100) 150 (200) 500 6. You just took out a 30 year \$400,000 loan to buy a house, the monthly payments are 2,661.21. What is the interest rate? Suggested Answers 1.) 1 year = \$10,500; 2 years = \$11,025; 5 years = \$12,763; 20 years = \$26,533 2.) 1 year = \$72,727; 2 years = \$66,116; 5 years = \$49,674; 20 years = \$11,891 3.) Approximately 140 months 4.) (\$1,036,668) 5.) \$207.96 6.) 7%...
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