FIN 571 Week 2 Individual Homework
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FIN 571 Week 2 Individual Homework
Week 2 Individual Homework Submit Through Gradebook In Excel
1- Your daughter would like to attend college in 5 years. You have determined that if you have
$60,000 when she begins college you will be able to pay for her 4 year degree. You have
opportunity to invest at 12%. How much must you put away in equal annual payments in order
to achieve your goal of $60,000 in 5 years?
2- Assuming you have opportunity to invest at 15 percent, which would you prefer, $12,000
today or $27,000 in 5 years?
3- Beginning in 6 years you will receive $12,000 a year for 4 years from a trust. You plan to
retire in 15 years. How much will you have at that time from the income of this trust if you have
opportunity to invest at 8%?
4- Assuming your interest is compounded monthly, how much will $5,000 grow to in 5 years at
an interest rate of 10%?
5- You just received an inheritance of $60,000. You need to have $40,000 in 5 years for your
daughters tuition. You have opportunity to invest at 12%. You feel an urgent need to spend
your cash on a nice car. How much can you spend on your car today and still be able to fund the
$40,000 tuition in 5 years?
1. Calculating Interest Rate. Find the annual interest rate for the following:
Present Value
Years
Future Value