Time value of money and rate of interest

Question 1. How much would you accept in lump sum today, in place of a lottery payment of $50,000 at the end of each of 20 years. ($1.000,000 in total), assuming you could invest it at an 8% rate?

Question 2. What will be the value in 20 years of $5,000 contributed at the end of each year into an IRA (individual retirement account) which pays 8%?

Question 3. What should you be willing to pay today for a contract to receive $50,000 in 10 years assuming an 8% interest rate?

Question 4. What rate of interest am I paying if my monthly payment is $400.00 on a $15,000 loan to be paid off in 4 years?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Time value of money and rate of interest
Reference No:- TGS01797161

Now Priced at $25 (50% Discount)

Recommended (99%)

Rated (4.3/5)

2015 ┬ęTutorsGlobe All rights reserved. TutorsGlobe Rated 4.8/5 based on 34139 reviews.