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# you are interested in saving money for your first house. your plan is to make regular deposits into an account that will earn 12.20% per year. your first deposit of \$4,500 will be made today. you also plan to make additional deposits at the end each of the next 9 years of \$2,000. how much money will be in your account after making your final deposit?

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### James

Guys, does anyone know the answer?

get you are interested in saving money for your first house. your plan is to make regular deposits into an account that will earn 12.20% per year. your first deposit of \$4,500 will be made today. you also plan to make additional deposits at the end each of the next 9 years of \$2,000. how much money will be in your account after making your final deposit? from EN Bilgi.

## You are interested in saving money for your first house. Your plan is to make regular deposits into an account that will earn 12.20% per year. Your first deposit of \$4,500 will be made today. You also

Answer to: You are interested in saving money for your first house. Your plan is to make regular deposits into an account that will earn 12.20% per...

Future value

## You are interested in saving money for your first house. Your plan is to make regular deposits...

You are interested in saving money for your first house. Your plan is to make regular deposits... Question:

You are interested in saving money for your first house. Your plan is to make regular deposits into an account that will earn 12.20% per year. Your first deposit of \$4,500 will be made today. You also plan to make additional deposits at the end of each of the next 9 years of \$2,000. How much money will be in your account after making your final deposit?

a) \$42,483 b) \$46,096 c) \$41,041 d) \$41,389 e) \$41,012

## Future Value:

Future value is an important concept in the time value of money. Future value of an amount is calculated using the below formula

F u t u r e v a l u e = I n i t i a l A m o u n t ∗ ( 1 + i n t e r e s t ) T i m e

Future value =Initial Amount∗(1+interest)Time

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There are two cash flows. A single lump sum payment of \$4,500 and one annuity of \$2,000. We need to calculate the future...

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How to Calculate Future Value: Formula & Example

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Chapter 5 / Lesson 16

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Future value refers to how much an asset will be worth in the future. Learn how to calculate future value using a formula that includes the original investment, interest rate, and number of periods, study examples of this calculation.

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## fin q2 Flashcards

Start studying fin q2. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

## fin q2

You expect to receive \$5,500 in 9 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 7.25%.

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\$2,929

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What is the monthly payment on a \$770,000 mortgage? Assume a standard 30-year, 5.5% mortgage with monthly payments.

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\$4,371

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### Terms in this set (79)

You expect to receive \$5,500 in 9 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 7.25%.

\$2,929

What is the monthly payment on a \$770,000 mortgage? Assume a standard 30-year, 5.5% mortgage with monthly payments.

\$4,371

You just won the lottery, which promises you \$440,000 per year for the next 20 years. You receive the first payment today (hint: annuity due). If your discount rate is 9.00%, what is the present value of your winnings?

\$4,378,050

You just paid \$925 for a security that claims it will pay you \$2,175 in 9 years. What is your annual rate of return?

9.97%

What is the future value of \$8,500 in 8 years? Use a nominal rate (monthly compounding) of 9.25%.

\$17,764

What is the future value of an annuity due that pays \$850 per year for 7 years? Use an annual effective interest rate of 7.75%.

\$8,109

Estimate the effective annual rate (EAR) for a continuously compounded annual nominal rate of 8.75%.

9.1442%

Consider a \$100,000, 30-year, 5.4% mortgage with monthly payments. What portion of the payments during the first 25 months goes toward principal?

20.98%

What is the present value of a perpetuity that pays you annual, end-of-year payments of \$750? Use a nominal rate of 9.38%.

\$7,995

You are interested in saving money for your first house. Your plan is to make regular deposits into an account that will earn 12.20% per year. Your first deposit of \$4,500 will be made today. You also plan to make additional deposits at the end each of the next 9 years of \$2,000. How much money will be in your account after making your final deposit?

\$42,483

Orlando Builders Inc. issued a bond with a par value of \$1,000, a coupon rate of 8.00% (semiannual coupon), and a yield to maturity of 6.70%. The bond has 9 years to maturity. What is the value of the bond?

\$1,086

What is the value of zero-coupon bond with a par value of \$1,000 and a yield to maturity of 5.90%? The bond has 17 years to maturity.

\$377.37

You own a bond with a par value of \$1,000 and a coupon rate of 8.25% (annual coupon). It is currently worth \$935. What is its yield to maturity? The bond has 8 years to maturity.

9.44%

You own a bond with a par value of \$1,000 and a coupon rate of 7.00% (semiannual coupon). You know it has a current yield of 9.50%. What is its yield to maturity? The bond has 5 years to maturity.

Current Yield = (annual payment / price). (hint: solve for price to answer the question).

14.60%

Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase?

Firm Beta Expected Return Anderson, Inc. 0.90 10.5% Delta Vanlines 1.24 13.0% Nathan's Bakeries 1.50 16.0% Z-man Electronics 2.15 19.0% Nathan's Bakeries

You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the portfolio?

Stock Amount Beta Expected Return Apple \$1,000 2.40 10.50% Microsoft \$7,000 0.73 16.90% Ford \$6,000 1.95 15.75% Time Warner \$6,000 1.27 11.80% 14.71%

If you deposit \$8,500 in an account now, how much will be in the account at the end of 5 years? Use a nominal rate (monthly compounding) of 8.00%.

\$12,663

What is the effective annual rate (EAR) for a nominal rate (quarterly compounding) of 8.50%?

8.7748%

What is the present value of an annuity that pays \$74 per year for 5 years and an additional \$1,000 with the final payment? Use a nominal rate of 9.65%.

\$913.85

Consider the following returns and states of the economy for TZ.Com.:

Economy Probability Return Weak 15% 2% Normal 50% 8% Strong 35% 15%

What is the standard deviation of TZ's returns?

4.49%

You expect to receive \$5,000 in 6 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 9.50%.

\$2,900

You just won the lottery, which promises you \$990,000 per year for the next 20 years. You receive the first payment today (hint: annuity due). If your discount rate is 9.75%, what is the present value of your winnings?

\$9,410,263

You just paid \$1,020 for a security that claims it will pay you \$2,000 in 8 years. What is your annual rate of return?

8.78%

You just deposited \$9,000 in an account. What is the future value in 9 years? Use a nominal rate (monthly compounding) of 8.00%

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James 9 month ago

Guys, does anyone know the answer?