Determining the present value of cash flow stream


1) Find the number of years that would take $50 to double if you invested it in the bank which pays 7.25% per year?

2) You wish to purchase new sports car four years from now, and you plan to save= $4,300 per year, beginning immediately. You will make four deposits in the account which pays 4.50% interest. Under these suppositions, how much will you have four years from today?

3) Investment promises given cash flow stream: $1,500 at Time 0; $2,750 at the ending of Year 1 (or at t = 1); $3,150 at the ending of Year two; and $5,000 at the ending of Year three. At the discount rate of 9.0%, determine the present value of cash flow stream?

4) You plan to have a loan of= $50,000 at 9% annual interest rate. Terms need you to amortize loan with 10 equal end-of-year payments. How much interest would you be paying in Year three?

5) You just put= $3,000 in the bank account which pays a 7% nominal interest rate, compounded quarterly. If you also put in another= $9,000 to account 1 year (12 months) from now and another = $7,500 to account 2 years from now, how much will be in account 3 years (12 quarters) from now?

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Finance Basics: Determining the present value of cash flow stream
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