What is the present value of having $22,000 in 6 years, when the interest rate is 4% ? Place your answer with two decimal 2 places in cell B3.3 Present Value = 4 If the interest rate changed to 6%, would the present value 5 increase or decrease? Why? Answer and explain why in cell A 6. 6 If the time frame was changed from 6 years to 5 years, would the present value of having $22,000 in the future increase or 8 decrease? Why? Answer and explain why in cell A8.

What is a dividend?

If you receive 500 in simple interest on a loan that you made for 10,000 for five years, what was the interest rate you charged?

Calculate the equity each of these people has in his or her home: Fred just bought a house for 200,000 by putting 10 as a down payment and borrowing the rest from the bank. Freda bought a house for 150,000 in cash, but if she were to sell it now, it would sell for 250,000. Frank bought a house for 100,000. He put 20 down and borrowed the rest from the bank. However, the value of the house has now increased to 160,000 and he has paid off 20,000 of the bank loan.

A mortgage 105m is a loan that a person makes to purchase a house. Table 19.11 provides a list of the mortgage interest rate for several different years and the rate of inflation for each of those years. In which years would it have been better to be a person borrowing money from a bank to buy a home? In which years would it have been better to be a bank lending money?

How is buying a house to live in a type of financial investment?

When do firms receive money from a stock sale in their firm and when do they not receive money?

Imagine that a local water company issued 10,000 ten-year bond at an interest rate of 6. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9. Given the change in interest rates, would you expect to pay more or less than 10,000 for the bond? Calculate what you would actually be willing to pay for this bond.

Which has a higher average return over time: stocks, bands, or a savings account? Explain your answer.

What does a share of stock represent?