Time Value of Money
1. How much will you have in 7 years if you invest $6000 today and you believe you can get a 6% return on your investment?
2. How much do you have to invest today to have $50,000 in 15 years if you believe you can get 7% return on your investment?
3. Would you pay someone $500 today to get $600 in five years if your opportunity cost of capital is 7% (opportunity cost of capital is the rate you expect to make)?
4. How much would you pay someone today to get $10,000 in 8 years if your opportunity cost of capital is 8%?
5. If you invest $5000 each year until you retire (for 40 years) how much will you have at the end of 40years? (your first investment is 1 year from today and your last is 40 years from today) Your return is expected to be 8%.
6. How much will you pay someone today in order to receive $6,000 each year for the next 10 years? Your opportunity cost of capital is 7%.