Assignment
Problem-1
Determine the present values if $5,000 is received in the future (i.e., at the end of each indicated time period) in each of the following situations:
5 percent for ten years
7 percent for seven years
9 percent for four years
Problem-2
Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of the first year.
Problem-3
Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years from now if the annual discount rate is 4 percent.
Problem-4
What is the present value of a loan that calls for the payment of $500 per year for six years if the discount rate is 10 percent and the first payment will be made one year from now? How would your answer change if the $500 per year occurred for ten years?
Problem-5
Determine the annual payment on a $500,000, 12 percent business loan from a commercial bank that is to be amortized over a five-year period.
Problem-6
Determine the annual payment on a $15,000 loan that is to be amortized over a four-year period and carries a 10 percent interest rate. Also prepare a loan amortization schedule for this loan.