Suppose you have an opportunity to invest in a fund that pays 12% interest compounded annually. Today, you invest $10,000 into this fund. Three years later(EOY 3), you borrow $5,000 from a local bank at 10% annualinterest and invest it in the fund. Two years later (EOY 5), you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal (EOY 8) you start taking $2,000 per year out of the fund. After five withdrawals of $2,000, you have withdrawn your original $10,000. The amount remaining in the fund is earned interest. How much remains?

Q: 3) equal deposits. The first deposit is made right now, the second, one year from now, and the…

A: Given data; amount needed to be accumulated = $ 25,000 Number of year= 3 interest rate = 5% deposits…

Q: 8. Mr. Diamond expects to invest $1000 per year for each of the next 20 years in an investment plan…

A: Return from investment plan (F) in which invest $1000 per year at 10% compound interest rate for 20…

Q: you are to receive $ 16700 from your trust fund in 7.5 years. you negotiate a deal where you can…

A: Future value refers to the value of current asset at some future date affected by interest and…

Q: You are making $5,000 monthly deposits into a fund that pays interest at rate of 6% compounded…

A: We need to use the concept of time value of money (TVM) to solve the question. According to TVM, the…

Q: Suppose you have an opportunity to invest in a fund that pays 13% interest compounded annually.…

A: Initial investment in fund = $5000Interest on fund = 13%Loan amount = $2500Interest on loan = 8%To…

Q: (Comprehensive problem) You would like to have $57,000 in 13 years. To accumulate this amount, you…

A: Here,ParticularsValuesFuture value (FV) $  57,000.00Number of years (NPER)13.00Interest rate…

Q: Fifteen years ago deposited 12500 in to an investment fund.five years ago you added an additional…

A: a) The computation of effective annual rate for 10 year: Hence, the effective annual rate is 8.16%.

Q: Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an…

A: Calculation of effective annual rate (EAR): Answer: Effective annual rate (EAR) is 8.16%

Q: Fifteen years ago deposited 12500 in to an investment fund.five years ago you added an additional…

A: a) Computation:

Q: An investor makes a single deposit of 10,000 into fund A for 10 years which earns a 6% effective…

A: Given, The amount invested is 10,000

Q: You deposit $600 today into a fund that you intend to leave invested for 6 years. The fund earns 6%…

A: Solution:When some amount is invested somewhere, it earns interest on it.The amount initially…

Q: Suppose you have the opportunity to invest in a fund that pays 12% interest compounded annually.…

A: Given:workings:

Q: An investor needs $22,000 in 11 years. (a) What amount should be deposited in a fund at the end of…

A: This pertains to the concept of time value of money. Money deposited or invested today grows in…

Q: growth fund who’s annual rate of return average is 13%. Five years later, you transfer all…

A: in this you have to find out future value of fund and than all amount investment in IRA FUND.

Q: Two years ago, a person borrowed $10,000 at 12% interest compounded monthly, which is to be paid in…

A: Loans are to be paid by the equal monthly installments and these equal monthly installments carry…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.