Time Value of Money Assignments - 2659 Words

Time Value of Money (TVM) Assignments: 1. Calculating Interest Rates In 2011, the automobile industry announced the average vehicle selling price in the United States was $28,835. Five years earlier, the average price was $21,608. What was the annual increase in vehicle selling price? *** Enter 5 N Solve for 2. I/Y 5.94% N Solve for 5.5% I/Y 80 10% I/Y Solve for ï‚ ±$150,000 $40,000 PV PMT FV $1,000,000 PV PMT FV $488.19 Calculating Interest Rates and Future Values In 1895, the first U.S. Open Golf Championship was held. The winner’s prize money was $150. In 2003, the winner’s check was $1,080,000. What was the percentage increase in the winner’s check over this period? If the winner’s prize increases at the same rate,†¦show more content†¦Which of these cash flow streams has the higher present value if the discount rate is five percent? If the discount rate is 22 percent? *** Enter 9 N 5% I/Y Solve for Enter 5 N Enter PMT FV 5% I/Y $6,000 PV PMT FV $25,976.86 9 N 22% I/Y Solve for Enter $4,000 PV $28,431.29 Solve for $4,000 PV PMT FV $15,145.14 5 N 22% I/Y Solve for 12. $0 CFj CFj CFj CFj CFj $6,000 PV PMT FV $17,181.84 Future Value and Multiple Cash Flows Rasputin, Inc., has identified an investment project with the following cash flows. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4? What is the future value at a discount rate of 11 percent? At 24 percent? Year 1 2 3 4 *** Enter 3 N 8% I/Y Cash Flow $800 900 1,000 1,100 $800 PV PMT Solve for Enter $1,007.77 2 N Solve for FV 8% I/Y $900 PV PMT FV $1,049.76 Enter 1 N 8% I/Y $1,000 PV PMT Solve for FV = $1,007.77 + 1,049.76 + 1,080.00 + 1,100.00 = $4,237.53 Enter 3 N 11% I/Y PV PMT 2 11% I/Y $900 PV PMT Solve for N 11% I/Y $1,000 PV PMT Solve for FV = $1,094.10 + 1,108.89+ 1,110 + 1,100.00 = $4,412.99 3 N 24% I/Y PV PMT N 24% I/Y $900 PV PMT Solve for FV $1,383.84 1 N 24% I/Y $1,000 PV PMT Solve for FV = $1,525.30 + 1,383.84 + 1,240.00 + 1,100.00 = $5,249.14 13. FV $1,525.30 2 Enter FV $1,110.00 $800 Solve for Enter FVShow MoreRelatedPersonal Financial Planning1579 Words   |  7 Pages | ADM 3445 (FR01B) Personal Financial Planning Course Outline Instructor: E. Otuteye Term: Winter 2012 Office: SH 362 Day(s): W Phone: 506 458-7354 Time: 7:00-9:50pm Email: otuteye@unb.ca Classroom: SH 161 Office hours: Th, F 2:00 – 3:00; by appointment; also, usually available immediately after class. 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