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Time Value of Money Exercises 001 e is the balance of the...

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Accounting

Time Value of Money Exercises image
001 e is the balance of the fund at the end of 2011 (after the 2011 deposit)? ays interest at 4% compounded annually. What Ex. 4 Mandy How plans to buy an automobile and can deposit $2,000 toward the purchase today. If the annual interest rate is 8%, how much can Mandy expect to have as a down payment in 3 years? Ex. 5 Rob Honda plans to buy a home and can deposit $10,000 for the purchase today. If the annual interest rate is 8%, how much can Rob expect to have for a down payment in 5 years? Ex. 6 Bill and Ellen Sweatt plan to invest $2,000 a year in an educational IRA for their granddaughter Sloane Martin. They will make these deposits on January 2nd of each year. Bill and Ellen feel they can safely earn 8%. How much will be in this account on December 31 of the 18h year? Ex. 7 (a) What is the present value of $80,000 due 7 years from now, discounted at 9%? (b) What is the present value of $120,000 due 5 years from now, discounted at 12%? Ex. 8 Flower Company is considering an investment which will return a lump sum of $2,000,000 six years from now. What amount should Flower Company pay for this investment to earn an 11% return

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