Questions from General Finance

Q: What is the present value of each of the following annuities?

What is the present value of each of the following annuities? a. $2,500 a year for 10 years discounted back to the present at 7 percent b. $70 a year for 3 years discounted back to the present at 3 pe...

Q: Nicki Johnson, a sophomore mechanical engineering student, receives a call

Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about sever...

Q: At what annual rate would the following have to be invested?

At what annual rate would the following have to be invested? a. $500 to grow to $1,948.00 in 12 years b. $300 to grow to $422.10 in 7 years c. $50 to grow to $280.20 in 20 years d. $200 to grow to $49...

Q: If you invest $900 in a bank in which it will

If you invest $900 in a bank in which it will earn 8 percent compounded annually, how much will your investment be worth at the end of 7 years? Use a spreadsheet to do your calculations.

Q: Compare valuing preferred stock and common stock.

Compare valuing preferred stock and common stock.

Q: In 20 years you’d like to have $250,000 to

In 20 years you’d like to have $250,000 to buy a vacation home, but you have only $30,000. At what rate must your $30,000 be compounded annually for it to grow to $250,000 in 20 years? Use a spreadshe...

Q: Springfield mogul Montgomery Burns, age 80, wants to retire at

Springfield mogul Montgomery Burns, age 80, wants to retire at age 100 in order to steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw $1 billion at the beginning of each y...

Q: Imagine that Homer Simpson actually invested $100,000 5 years

Imagine that Homer Simpson actually invested $100,000 5 years ago at a 7.5 percent annual interest rate. If he invests an additional $1,500 a year at the beginning of each year for 20 years at the sam...

Q: a. Calculate the future sum of $5,000,

a. Calculate the future sum of $5,000, given that it will be held in the bank for 5 years at an annual interest rate of 6 percent. b. Recalculate part (a) assuming the interest rates is (1) an APR of...

Q: After examining the various personal loan rates available to you, you

After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at an APR of 12 percent compounded monthly or from a bank at an APR of 13 pe...