Question

1.

You have $49,061.69 in a brokerage account, and you plan todeposit an additional $5,000 at the end of every future year untilyour account totals $200,000. You expect to earn 9.1% annually onthe account. How many years will it take to reach your goal? Roundyour answer to the nearest whole number.

2.

Present and Future Value of an Uneven Cash Flow Stream

An investment will pay $100 at the end of each of the next 3years, $300 at the end of Year 4, $600 at the end of Year 5, and$800 at the end of Year 6. If other investments of equal risk earn11% annually, what is its present value? Round your answer to thenearest cent.
$

What is its future value? Round your answer to the nearestcent.
$

3.

You want to buy a car, and a local bank will lend you $20,000.The loan would be fully amortized over 3 years (36 months), and thenominal interest rate would be 12%, with interest paid monthly.What is the monthly loan payment? Round your answer to the nearestcent.
$

What is the loan's EFF%? Round your answer to two decimalplaces.
%

4.

1. Find the present values of the following cash flow streams. Theappropriate interest rate is 5%. Round your answers to the nearestcent. (Hint: It is fairly easy to work this problemdealing with the individual cash flows. However, if you have afinancial calculator, read the section of the manual that describeshow to enter cash flows such as the ones in this problem. This willtake a little time, but the investment will pay huge dividendsthroughout the course. Note that, when working with thecalculator's cash flow register, you must enter CF₀ = 0.Note also that it is quite easy to work the problem with Excel,using procedures described in the Chapter 4 Tool Kit.)

   Year	Cash Stream A	Cash Stream B
   1	$100	$300
   2	400	400
   3	400	400
   4	400	400
   5	300	100

   
   Stream A $
   Stream B $
   
2. What is the value of each cash flow stream at a 0% interestrate? Round your answers to the nearest cent.
   Stream A $
   Stream B $

5.

Find the future values of the following ordinary annuities:

1. FV of $200 paid each 6 months for 4 years at a nominal rate of12%, compounded semiannually. Round your answer to the nearestcent.
   $
   
2. FV of $100 paid each 3 months for 4 years at a nominal rate of12%, compounded quarterly. Round your answer to the nearestcent.
   $
   
3. The annuities described in parts a and b have the same amountof money paid into them during the 4-year period and both earninterest at the same nominal rate, yet the annuity in part b earnsmore than the one in part a over the 4 years. Why does thisoccur?
   -Select-The nominal deposits into the annuity in part (b) aregreater than the nominal deposits into the annuity in part (a). Theannuity in part (a) is compounded less frequently; therefore, moreinterest is earned on interest. The annuity in part (a) iscompounded more frequently; therefore, more interest is earned oninterest. The annuity in part (b) is compounded less frequently;therefore, more interest is earned on interest. The annuity in part(b) is compounded more frequently; therefore, more interest isearned on interest.

6.

To complete your last year in business school and then gothrough law school, you will need $25,000 per year for 4 years,starting next year (that is, you will need to withdraw the first$25,000 one year from today). Your uncle offers to put you throughschool, and he will deposit in a bank paying 9.57% interest a sumof money that is sufficient to provide the 4 payments of $25,000each. His deposit will be made today.

1. How large must the deposit be? Round your answer to the nearestcent.
   $
   
2. How much will be in the account immediately after you make thefirst withdrawal? Round your answer to the nearest cent.
   $
   
   How much will be in the account immediately after you make the lastwithdrawal? Round your answer to the nearest cent. Enter "0" ifrequired
   $

7.

You need to accumulate $10,000. To do so, you plan to makedeposits of $1,450 per year - with the first payment being made ayear from today - into a bank account that pays 10.24% annualinterest. Your last deposit will be less than $1,450 if less isneeded to round out to $10,000. How many years will it take you toreach your $10,000 goal? Round your answer up to the nearest wholenumber.
year(s)

How large will the last deposit be? Round your answer to thenearest cent.
$

8.

1. It is now January 1. You plan to make a total of 5 deposits of$300 each, one every 6 months, with the first payment being madetoday. The bank pays a nominal interest rate of 10% butuses semiannual compounding. You plan to leave the moneyin the bank for 10 years. How much will be in your account after 10years? Round your answer to the nearest cent.
   $
   
2. You must make a payment of $1,788.84 in 10 years. To get themoney for this payment, you will make 5 equal deposits, beginningtoday and for the following 4 quarters, in a bank that pays anominal interest rate of 8% with quarterly compounding.How large must each of the 5 payments be? Round your answer to thenearest cent.
   $