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.

is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. The present value of a loan in which $1000 is to be paid out a year from today with the interest rate equal to 1% is $. (Round your response to the neareast two decimal place) If a loan is paid after two years, and the amount $1000 is to be paid then with a corresponding 2% interest rate, the present value of the loan is $. (Round your response to the neareast two decimal place) Next 11:41 AM

How much money will you have in seven yearsif you deposit $7,000 in the bank at 8.5% interestcompounded daily?

10 Using the Rule of 72, calculate how much $10,000 will grow over 30 years at 2% annual return; and 10% annual return?

3

Economics In 54 months time you expect a cash flow of $3 million. Calculate it’s present value (PV) given the 54-month interest rate is currently 4%, with a volatility of 120 basis points (bps). Explain, using equations with properly-defined mathematical notation, how to map this cash flow to vertices at 4 years and 5 years, in such a way that the volatility of the present value of the mapped cash flow remains at 120 bps. Suppose the 4-year rate has a volatility of 110 bps and the 5-year rate has a volatility of 150 bps, and their correlation is 0.9. How much should be mapped to each vertex. Give your answer in PV terms and round your answers to whole $ values.

1. Future and present values Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 5%, consider the present and future values of this gift, depending on when you become engaged. Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money. Date Received Today In 1 year In 2 years Present Value (Dollars) 1,000.00 Value in One Year (Dollars) 1,000.00 Value in Two Years (Dollars) 1,000.00 Now complete the first column of the previous table by computing the present value of the gift if you get engaged in one year or two years. The present value of the gift is if you get engaged in one year than it is if you get engaged in two years.

4. Looking forward - Future value Compounding Interest You know that paying yourself by depositing money in a savings account is a prudent start to your retirement plan. You determined that, based on your other obligations, you can save 7,375.00 per year via an annual, single year-end deposit. You are 40 years old now, so your money will grow for the next 25 years until you turn 65. You will open a savings account at the US Bank branch near your home. Its savings accounts are paying 6% interest. The following table shows the future value factors for various periods and interest rates: Future Value of an Annuity Factor 3% 6% 8% 9% 10% 5% 12.578 10.950 11.460 13.180 14.487 15.190 15.937 13.412 14.190 15.917 16.870 18.977 20.140 21.384 17.293 18.600 21.578 23.270 27.152 29.360 31.772 24.297 26.870 33.066 36.780 45.762 51.160 57.274 32.030 36.460 47.726 54.860 73.105 84.700 98.346 40.567 47.570 66.438 79.060 113.282 136.300 164.491 49.994 60.460 90.318 111.430 172.314 215.700 271.018…

9. In how many years will $1,500 yield an interest of 5200 at 2% simple interest?

Cash Flow is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. Part 2 The present value of a loan in which $1000 is to be paid out a year from today with the interest rate equal to 5​% is $. ​(Round your response to the neareast two decimal​ place) Part 3 If a loan is paid after two​ years, and the amount $7000 is to be paid then with a corresponding 7​% interest​ rate, the present value of the loan is ​$. ​(Round your response to the neareast two decimal​ place)