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FINA1221 Quiz: 4

384 views2 pages
bluefox653
16 Jun 2019
School
UWA
Department
Finance
Course
FINA1221
Professor
Frank Liu

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Document Summary

You have just received a windfall from an investment you made in a friend"s business. She will be paying you ,000 at the end of this year, ,000 at the end of the following year, and ,000 at the end of the year after that (three years from today). Total = ,389: what is the future value of your windfall in three years (on the date of the last payment) Fv = 55,389 x (1. 035)^3 = ,410. 77: the british government has a console bond outstanding paying 100 pound per year forever. Pv = 100 + (100/4%) = ,600: assume that your parents wanted to have ,000 saved for university by your 18th birthday and they started saving on your rst birthday. If they think you will take four years instead of three to graduate and decide to have. . 806/(1/0. 08)x(1-(1/1. 08^18) = 5340. 42: a rich relative has bequeathed you a growing perpetuity.

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Related Questions

Your daughter is currently 6 years old. You anticipate that she will be going to college in 12 years. You would like to have $137,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 12% per​ year, how much money do you need to put into the account today to ensure that you will have $137,000 in 12 ​years?

Your deposit today should be

​$.

​ (Round to the nearest​ dollar.)

Suppose you receive $180 at the end of each year for the next three years.

a. If the interest rate is 7%​, what is the present value of these cash​ flows?

b. What is the future value in three years of the present value you computed in (a​)?

c. Suppose you deposit the cash flows in a bank account that pays 7% interest per year. What is the balance in the account at the end of each of the next three years​ (after your deposit is​ made)? How does the final bank balance compare with your answer in ​(b​)?

a. If the interest rate is 7%​, what is the present value of these cash​ flows?

The present value of these cash flows is

​$ .

​ (Round to the nearest​ cent.)

You have just received a windfall from an investment you made in a​ friend's business. He will be paying you $31,004 at the end of this​ year, $62,008 at the end of the following​ year, and $93,012 at the end of the year after that​ (three years from​ today). The interest rate is 13.3% per year.

a. What is the present value of your​ windfall?

b. What is the future value of your windfall in three years​ (on the date of the last​ payment)?

a. What is the present value of your​ windfall?

The present value of your windfall is

​$.

​ (Round to the nearest​ dollar.)

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