1. Calculate the future value of 1,535 invested today for 8 years at 6 percent.
2. What is the total present value of the following cash stream, discounted at 8 percent?
Year 1 2 3 4 5
400 750 945 145 78
3. If you invested $2,000 per year into an IRA for 30 years and received 6 percent return each year, what would the account balance be in 30 years?
4. A friend gives you a proposition. If you give him 1,500 dollars today, he will guarantee your receive 12 percent compounded annually on your investment. How much money will you receive from him at the end of 5 years?
5. You want to buy a new Computer Aided Design (CAD) system for your business. The cost of the system is $150,000 and you expect to save over $40,000 per year in reduced labor costs. Please calculate the net present value of the CAD if your required return is 10 percent and the life of the system is expected to be 5 years.
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SOLUTION PREVIEW
1. Calculate
the future value of 1,535 invested today for 8 years at 6 percent.
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Rate =
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6%
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Nper =
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8
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PV =
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-1,535
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FV =?
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