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In: Accounting

1) Determine the answer to each of the following questions. 1a. Find the Future Value of...

1) Determine the answer to each of the following questions.

1a. Find the Future Value of $2500 invested today at 11% for 10 years.
1b. Find the Future Value of $2500 invested today at 11% for 30 years.
1c. Find the Present Value of $6000 received 10 years from today if the discount rate is 5%.
1d. Find the Present Value of $6000 received 10 years from today if the discount rate is 10%.
1e. Find the Future Value of $3000 per year (at the end of each year) invested at 6% for 30 years.
1f. Find the Future Value of $3000 per year (at the end of each year) invested at 12% for 30 years.
1g. Find the Present Value of $4000 per year (at the end of each year) if the discount rate is 15% for 20 years.
1h. Find the Present Value of $4000 per year (at the end of each year) if the discount rate is 15% for 40 years.

2) Find the interest rates implied by each of the following:

2a. You borrow $1500 today and promise to repay the loan by making a single payment of $2114.00 in 5 years.
2b. You invest $500 today and receive a promise of receiving back $193.50 for each of the next 4 years.

3) If $2000 is invested today at a 12% nominal interest rate, how much will it be worth in 15 years if interest is compounded

3a. Annually
3b. Quarterly
3c. Monthly
3d. Daily (365-days per year)

4) How long will it take your money to triple given the following interest rates?

4a. 5%
4b. 10%
4c. 15%

5) After graduating from college you make it big — all because of your success in business finance. You decide to endow a scholarship for needy finance students that will provide $5000 per year indefinitely, beginning 1 year from now. How much must be deposited today to fund the scholarship under the following conditions.

5a. The interest rate is 10%
5b. The interest rate is 10% and the first payment is made 6 years from today instead of 1 year from today.

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