1, You have the opportunity to purchase a property that will generate an income stream of $25,000...

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Question:

1, You have the opportunity to purchase a property that will generate an income stream of $25,000 per year. After five years, the asset can be sold for $325,000/ The required rate of return is 10%. You want to know how much to pay for this asset today.

a, What are you solving for?

b, Draw a T-bar

c, How much should be paid for this today?

2, A reserve account is created in which $28,000 is deposited each year. The annual interest rate is 7%. You want to know how much will be accumulated in your years.

a, What are you solving for?

b, Draw a T-bar

c, After your years, how much will be accumulated?

3, You must accumulate $200,000 five years from now for future improvements. You choose to deposit cash flow into an account with an annual interest rate of 8%. You want to know how much to deposit to accumulate $200,000 in five years.

a, What are you solving for?

b, Draw a T-bar

c, What is the annual deposit needed to accumulate $200,000 in five years?

4, You are offered a contract for a lump sum payment in the amount of $75,000 to be paid five years from now. You want to figure out what to pay today for this promise of money in the future if you expect a 10% annual return on your investment.

a, What are you solving for?

b, Draw a T-bar

c, what would you pay for this promise of money today, if you expect a 10% return on your investment?

5, Your creating a reserve account for future repaving. You can deposit $10,000 per year in an account bearing 8% interest, compounded annualy. You want to know how much will be accumulated in five years.

a, What are you solving for?

b, Draw a T-bar

c, How much will be accumulated in five years?

6, You must accumulate $45,000 three years from now for future improvements. You choose to deposit cash flow in an account that pays 7% interest, compounded annually. You want to know the annual deposit needed to accumulate $45,000 in three years.

a, What are you solving for?

b, Draw a T-bar

c, what is the annual deposit needed to accumulate $45,000 in three years?