Question 1

Acme Company wants to have $1,200,000 twenty years from today.How much must it put in the bank today to achieve this goal if it can earn 8 percent that is compounded monthly?

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Question 2

Your client is 25 years old and wants to start receiving payments of $100,000 per year when she retires on her 60^th birthday until her 89^th birthday.As her financial advisor,how much must she invest every year staring today to achieve her goal if she can earn 7 percent annual interest?

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Question 3

Lisa Corsetti would like to have $50,000 in 10 years time to pay for her daughters' college education.The amount that Corsetti would have to invest today,assuming an interest rate of 6% compounded semiannually,in order to reach her goal is:

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Question 4

You have $3,000 and are going to put it into a savings account.How much will you have in 10 years if you can earn:
(A.)7% compounded semi-annually?
(B.)10% compounded monthly?

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Question 5

Heather Whitestone wants to retire at the age of 65.She is 45 years old today and will start making semiannual deposits into an investment account in 6 months.Heather would like to have $1,000,000 on her 65th birthday.Assuming Whitestone can earn 8% interest compounded semiannually on her investments; determine the required amount of each semiannual deposit.

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Question 6

Johnstone Supply Company has $100,000 to invest.Determine the amount of money Johnstone will have at the end of 5 years in each of the following independent situations:
(
A)Johnstone invests the $100,000 to earn 7% interest compounded annually.
(b)Johnstone invests the $100,000 to earn 6% compounded semiannually.
(c)Johnstone invests the $100,000 to earn 4% compounded quarterly.

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Question 7

Mary and Becky are 22-year-old recent college graduates.Both want to be able to retire at age 50.Mary makes $1,200 annual payments starting immediately.Becky waits ten years,then begins making $2,400 annual payments.Both earn 6% annually on their savings.Which one will have paid more money into her retirement fund when she reaches age 50? Which will have the highest balance in her retirement fund? Why?

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Question 8

John Stamos will have $1,000,000 in his investment account on the day he retires.
Stamos would like to be able to make a series of equal quarterly withdrawals from the
account for 20 years beginning 3 months after he retires.Assuming the investment
account will earn 10% determine the amount of each quarterly withdrawal.

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Question 9

Susan Ivanova has just accepted a position as a test pilot for Babylon Industries.Her starting salary is $80,000 and she has been promised raises of at least five percent each year.What will Ivanova's salary be in ten years?

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Question 10

If $18,000 was invested at 10% interest compounded semiannually,and it grew to be $32,326.20,the number of years the money was invested totaled:

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Question 11

How much must you invest today to receive ten,$6,000 payments every 3 months (quarterly)if you can earn 10% annual interest?

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Question 12

The present value on April 1,2010 of 16 semiannual payments of $5,000 each,with the first payment to be made on October 1,2010,assuming an 8% interest rate compounded semiannually is:

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Question 13

Casey Cohen would like to have $24,500 in 5 years time to buy a car.The amount that Cohen would have to invest today,assuming an interest rate of 4% compounded annually,in order to reach his goal is:

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Question 14

Chuck Purinton wants to receive $120,000 a year when he retires at age 65 and expects to live until 85.He believes he can earn 7%.How much must he have saved to achieve this goal and what age must he have this money saved?

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Question 15

Joe Bittner has just passed his CPA exam and has a great job with a Big 4 CPA firm and has decided to buy a new BMW.If the price of the car is $36,000 how much will his monthly payments be if he make payments over the next 4 years if he can get a 6% interest rate?

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Question 16

Marcus Perry wants to retire at age 60 with $1,500,000.He is 23 years old today and says that on his 25^th birthday he will start making annual payments into a fund that will generate 7% interest.How much must Marcus put into the fund annually to achieve his goal?

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Question 17

You have just purchased a new Corvette Convertible for $52,000.You have paid $5,000 down and have financed the rest.The financing arrangement calls for you to make monthly payments for the next 5 years at an 8% interest rate.What will be the amount of your payment?

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Question 18

You are going to put $4,000 into a savings account every six months starting Sept 1,2010 and ending on March 1,2014.How much will be in the savings account on March 1,2014 if you can earn a 6% annual rate?

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Question 19

Frank Gatta invested $15,0000 in a bank account.If Gatta makes no withdrawals,how
much will Gatta have in the bank account balance after 7 years under each of the
following circumstances?
A.Earns 4% compounded annually
B.Earns 4% compounded monthly
C.Earns 6% compounded monthly

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Question 20

Given a 10% interest rate compounded semiannually,the dollar amount available on September 1,2015,assuming 12 semiannual deposits of $2,000 each with the first deposit made on March 1,2010,is:

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Quiz 11: Time Value of Money