Fin100 Week 5 Homework

Chapter 9Introduction to Finance FIN100Week 5 HomeworkP6 Determine the percent values if $5000 is received in the future (i.e. at the end of each indicated time period) in each of the following situations5% for 10 years$5000(.614) = $3070 7% for 7 years$5000(.623) = $31159% for four years$5000(.708) = $3540P9 Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your Frst $5,000 is invested at the end of the Frst year.$38,578.05P10 Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years from now if the annual discount rate is 4 percent.$3000/1.04 + $3000/(1.04)^2 = $2,884.61 + $2,773.67 = $5,656.28.P11 Determine the present value of a loan that calls for the payment of $500 per year for six years if the discount rate is 10 percent and the Frst payment will be made one year from now? Howwould your answer change if the $500 per year occurred for ten years?10% for 6 years: $500 (4.355) = $2,177.5010% for 10 years: $500 (6.145) = $3,072.50P12 Determine the annual payment on a $500,000, 12 percent

FIN100 Homework Week 5  Chapter 9: P6, P9, P10, P11, P12, P13, P15 P6. Determine the present values if $5,000 is received in the future (i.e., at the end of each indicated time period) in each of the following situations: a. 5 percent for ten years = PV= 5000/(1+0.05)^10 = 5000/1.6288 = FV = $3,069.7446 b. 7 percent for seven years = PV= 5000/(1+0.07)^7 = 5000/1.6057 = FV = $3,113.906 c. 9 percent for four years = PV = 5000/(1+0.09)^4 = 5000/1.4115 = FV = $3,542.3308 P9. Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of the first year. Used formula; FVa = PMT {(1+r)^n -1/r} First year 5000{(1+0.10)^1 -1 /0.10} = 5000{1.10-1/.10} = 5000 (.10/.10) = $5,000 Second year ; 5000{(1+0.10)^2 -1 /0.10} =5000{(1.10)^2 -1 /0.10}= 5000{1.21-1 /0.10}= 5000{.21/.10}= 5000(2.10) = FV= $10,500 Third year ; 5000{(1+0.10)^3 -1 /0.10} = 5000{(1.10)^3 -1 /0.10} = 5000{1.331-1 /0.10}= 5000{.331 /0.10}= 5000{3.31} = FV= $16,550 Fourth year ; 5000{(1+0.10)^4 -1 /0.10} = 5000{(1.10)^4 -1 /0.10} = 5000{1.4641-1/0.10} =5000{.4641 /0.10} = 5000{4.641} = FV = $23,205 Fifth year ; 5000{(1+0.10)^5 -1 /0.10} = 5000{(1.10)^5 -1 /0.10} = 5000{1.6105-1 /0.10} = 5000{(.6105 /0.10} = 5000{6.105} = FV = $30,525

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