1- (Solving for n) How many years will it take for $510 to grow to $1 comma 065.01 if it's invested
at 10 percent compounded annually?
2- (Present value) Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $395 comma 000 due in 26 years. In other words, they will need $395 comma 000 in 26 years. Toni Flanders, the company's CEO, is scrambling to discount the liability to the present to assist in valuing the firm's stock. If the appropriate discount rate is 8 percent, what is the present value of the liability?
3- Lance Murdock purchased a wooden statue of a Conquistador for $ 7 comma 900 to put in his home office 6 years ago. Lance has recently married, and his home office is being converted into a sewing room. His new wife, who has far better taste than Lance, thinks the Conquistador is hideous and must go immediately. Lance decided to sell it on e-Bay and only received $5 comma 500 for it, and so he took a loss on the investment. What was his rate of return, that is, the value of i?
What was Lance Murdock's rate of return, that is, the value of i? Enter a negative percentage for a loss.
4-You are offered $120 comma 000 today or $360 comma 000 in 13 years. Assuming that you can earn 13 percent on your money, which should you choose?
If you are offered $360000 in 13 years and you can earn 13 percent on your money, what is the present value of $360000?
5- (Calculating an EAR) Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one-year maturity and a fixed interest rate. The first certificate of deposit, CD #1, pays 4.95 percent APR compounded monthly, while the second certificate of deposit, CD #2, pays 5.00 percent APR compounded quarterly. What is the effective annual rate (the EAR) of each CD, and which CD do you recommend to your grandmother?
if the first certificate of deposit, CD #1, pays 4.95 percent APR compounded monthly, the EAR for the deposit is