HUI 28.doc

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1 How much do you need to invest today in order to have $11,986 at the end of 15 yrs if you are sure to earn an interest at the rate of 12%
2 How many yrs it will take you to quadruple your money if you can earn 1395% each year
3 What is the FV of $2,764 invested for 11 yrs at 13% if interest is compounded quarterly
4 Assume interest rate of 9% A company receives cash flows of $79,882 at the end of yrs 4, 5, 6, 7, and 8, and cash flows of $200,820 at the end of year 10
5 How much do you need to invest today in order to have $3,395 at the end of 16 yrs if you are sure to earn an interest at the rate of 14%, if interest is compounded quarterly
6 Assume interest rate of 9% Suppose that you receive $94,452 at the end of each year for 4 yrs Suppose that this cash flow starts at the end of the fourth year Compute the PV
7 The Insurance Co is trying to sell you an investment policy that will pay you and your heirs $12,217 per year forever Suppose the they told you the policy costs $198,704 At what interest rate would this be a fair deal
8 Kelly starting setting aside funds 8 yrs ago to buy some new equipment for her firm She has saved $5,182 each quarter and earned an average rate of return of 8 % How much money does she currently have saved for this purpose
9 G Co has an outstanding loan that calls for equal annual payments of $14,903 over the 10-year life of the loan The original loan amount was $100,000 at an APR of 8 % How much of the third payment is interest
10 How many months it will take to grow your money from $4,730 to $7,028 if you can earn an interest of 5% compounded monthly
11 If you can double your money in 13 yrs, what is the implied annual rate of interest, given that compounded in quarterly
12 Today, you are purchasing a $2,269 12-year car loan at 7 % You will pay annually at the end of each year What is the amount of each payment
13 If you receive $287 at the end of each year for the first three yrs and $982 at the end of each year for the next three yrs What is the PV Assume interest rate is 8%
14 In order to buy a house, you take a loan of 100,000 at 75% for a period of 13 yrs Compute the balance remaining at the end of 5 yrs
15 How many yrs it will take to grow your money from $4,140 to $9,250 if you can earn an interest of 7% compounded quarterly
17 Say, you deposit $3,613 in a bank for 16 yrs What is the amount you will have in the bank at the end of 16 yrs if interest of 4 % for first 9 yrs and interest of 7 % for the remaining yrs
18 How many yrs it will take you to double your money if you can earn 19% each year, given that compounding is quarterly
19 B is considering a drug project that costs $180,372 today and is expected to generate end-of-year annual cash flows of $11,811, forever At what discount rate would B be indifferent between accepting and rejecting the project
20 What is the FV of quarterly payments of $947 for 10 yrs at 7 %
21 How many yrs it will take you to triple your money if you can earn 9% each year, given that compounding is monthly
22 How much do you need to invest today in order to have $6,306 at the end of 28 yrs if you are sure to earn an interest at the rate of 6%, if interest is compounded monthly
23 Say, you deposit $2,035 in a bank for 15 yrs What is the amount you will have in the bank at the end of 15 yrs if interest of 5 % compounded monthly for first 7 yrs and interest of 10 % compounded quarterly for the remaining yrs
24 ABC is considering a new project which will require an initial cash investment of $2,061 The projected cash flows for yrs 1 through 4 are $9,241, $500, $1,061, and $547, respectively If the appropriate discount rate is 9%, compute the NPV of the project
25 What is the FV of $4,678 invested for 10 yrs at 14% if interest is compounded semi-annually (twice a year)
26 What should you be willing to pay in order to receive $899 annually forever, if you require 9% per year on the investment
27 Assume interest rate of 10% A company receives cash flows of $71,741 at the end of year 5, $173,694 at the end of year 7, and $295,872 at the end of year 10 Compute the FV of this cash flow stream
28 How many yrs it will take to grow your money from $4,331 to $6,242 if you can earn an interest of 14% compounded monthly
29 If you can double your money in 27 yrs, what is the implied annual rate of interest, given that compounded semi-annually
31 What is the FV of annual payments of $5,660 for 8 yrs at 6 %
32 Consider a 10-year loan with monthly payments at 10% If the loan amount is $250,000, compute the Interest paid during the 6th year
33 What is the FV of $12,153 for 9 yrs at 6 % if interest is compounded semi-annually
34 ABC is considering a new project which will require an initial cash investment of $2,297 The project will produce no cash flows for the first 5 yrs The projected cash flows for yrs 6 through 9 are $5,467, $900, $1,194, and $634, respectively If the appropriate discount rate is 14%, compute the NPV of the project