Future Value Compute the future value in year 9 of a $2,000 deposit

| March 31, 2017

Question
Need help with a few problems for Business Finance. Please work your answers onto an excel spreadsheet.

5-1

Future Value Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate.

5-3

Future Value of an Annuity What is the future value of a $900 annuity payment over five years if interest rates are 8 percent?

5-5

Present Value Compute the present value of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 if interest rates are 10 percent.

5-7

Present Value of an Annuity What’s the present value of a $900 annuity payment over five years if interest rates are 8 percent?

5-12

Present Value of an Annuity Due If the present value of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due?

5-15

Effective Annual Rate A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)?

5-39

Loan Payments You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be? (Calculate monthly payment only)

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