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FRL 300 Test Notes - 6 Draw the time line and solve for the...

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1. Draw the time line and solve for what $5000 would be worth 22 years from now if you could earn 6% interest. 2. Draw the time line and solve for what $5000 would be worth 22 years from now if you could earn 12%Interest. 3. If you answer to question 2 doubles your answer to question 1? Would you expect it to be since the only difference between the two problems is that the interest rate has doubled? 4. Draw the time line and solve for how long will it take for $7500 to be worth $90,420 if you can earn 14% interest each year. 5 .Draw the time line and solve for the discount rate it would require to have $250,000 be worth only $8350 if thirty years separated the two numbers
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Unformatted text preview: 6. Draw the time line and solve for the amount of money you would have to put into a bank account each and every year (starting one year from today) if it earns 18% interest each and every year and you want to accumulate $71,542 at year 5. 7. Draw the time line and solve for the amount of money you would have in your bank account if you put $100 each and every year (starting today) for thee years. You would be making a total of four $100 payments. The interest rate is 5% for each year. To find time “n” of annuity > FV= PVxPVIFA%,N Interest Rate of Annuity> AO=PMTxPVIFA%,N Lump of Sum> Pn=Po(1+r)^n Discounting Lump Sum>Po=Pn[1/(1+r)^n]...
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