Fin 370 Week 3 Tvm Assignment

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• Published : November 7, 2011

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TVM Exercises

TVM Table (X%, Xn)
Pmt (factor)

1. You invest \$5,000 at 6% compounded annually for 10 years. How much will you have at the end of year 10?

FV Table (6%, 10n)
\$5,000 (1.791)
\$8,955

2. You need \$200,000 10 years from now and know of an investment that pays a 10% return. How much do you need to invest today to achieve your goal?

PV Table (10%, 10n)
\$200,000 (0.386)
\$77,200

3. You are required to leave a \$1,000 security deposit for 8 years. The deposit as well as interest compounded at 5% per year. How much will you receive at the end of 8 years?

FV Table (5%, 8n)
\$1,000 (1.478)
\$1,478

4. How much would you have to invest to receive \$20,000 per year for 5 years if you can expect a 9% return on the investment?

FVA Table (9%, 5n)
\$20,000 (5.985)
\$119,700

5. You make annual deposits of \$8,000 for 10 years into an investment that pays 6% compounded annually. What amount will be in the account at the end of 10 years?

PVA Table (6%, 10n)
\$8,000 (7.360)
\$58,880

6. In 6 years, how much would \$7,000 grow to if the investment pays at a 5% rate?

FV Table (5%, 6n)
\$7,000 (1.340)
\$9.380

7. How much would you have to deposit today to receive \$10,000 in the future, assuming annual discounting, for the following? a. 6% for 5 years
PV Table (6%, 5n)
\$10,000 (0.747)
\$7,470

b. 10% for 5 years
PV Table (10%, 5n)
\$10,000 (0.621)
\$6,210

8. What would \$10,000 invested today be worth in the following time periods, assuming annual compounding: a. 7% for 4 years
FV Table (7%, 4n)
\$10,000 (1.311)
\$13,110

c. 5% for 4 years
FV Table (5%, 4n)
\$10,000 (1.216)
\$12,160

9. You estimate a college education will cost \$100,000 in 15 years when your child will be ready for college. How much do you need to deposit today to pay for the...