How long must one wait (to the nearest year) for an initial investment of $1,000 to triple in value if the investment earns 8% compounded annually? The attached questions needs to be answered in excel with the excel formulas.

Comp Problem # 1 Student: ___________________________________________________________________________ 1. What is the future value of $10,000 on deposit for 5 years at 6% simple interest? A. $7,472. 58 B. $10,303. 62 C. $13,000. 00 D. $13,382. 26 2. How much interest is earned in just the third year on a $1,000 deposit that earns 7% interest compounded annually? A. $70.0 0 B. $80.1 4 C. $105.6 2 D. $140.0 0 3. How much interest will be earned in the next year on an investment paying 12% compounded annually if $100 was just credited to the account for interest? A. $8 8 B. $10 0 C. $11 2 D. $20 0 4. Assume the total expense for your current year in college equals $20,000. How much would your parents have needed to invest 21 years ago in an account paying 8% compounded annually to cover this amount? A. $952.4 6 B. $1,600. 00 C. $1,728. 08 D. $3,973. 11 5. How long must one wait (to the nearest year) for an initial investment of $1,000 to triple in value if the investment earns 8% compounded annually? A. 9.81 years B. 14.27 years C. 22.01 years D. 25.00 years 6. How much will accumulate in an account with an initial deposit of $100, and which earns 10% interest compounded quarterly for 3 years? A. $107.6 9 B. $133.1 0 C. $134.4 9 D. $313.8 4 7. How much must be deposited today in an account earning 6% annually to accumulate a 20% down payment to use in purchasing a car one year from now, assuming that the car's current price is $20,000, and inflation will be 4%? A. $3,774. 61 B. $3,782. 20 C. $3,924. 53 D. $4,080. 08 8. In calculating the present value of $1,000 to be received 5 years from today, the discount factor has been calculated to be .7008. What is the apparent interest rate? A. 5.43 % B. 7.37 % C. 8.00 % D. 9.50 % 9. If the future value of an annuity due is $25,000 and $24,000 is the future value of an ordinary annuity that is otherwise similar to the annuity due, what is the implied discount rate? A. 1.04 % B. 4.17 % C. 5.00 % D. 8.19 % 10. A furniture store is offering free credit on purchases over $1,000. You observe that a big-screen television can be purchased for nothing down and $4,000 due in one year. The store next door offers an identical television for $3,650 but does not offer credit terms. Which statement below best describes the cost of the "free" credit? A. 8.75 % B. 9.13 % C. 9.59 % D. 0 % 11. How much must be invested today in order to generate a 5-year annuity of $1,000 per year, with the first payment 1 year from today, at an interest rate of 12%? A. $3,604. 78 B. $3,746. 25 C. $4,037. 35 D. $4,604. 78 12. The salesperson offers, "Buy this new car for $25,000 cash or, with an appropriate down payment, pay $500 per month for 48 months at 8% interest." Assuming that the salesperson does not offer a free lunch, calculate the "appropriate" down payment. A. $1,000. 00 B. $4,519. 04 C. $5,127. 24 D. $8,000. 00 13. What is the present value of the following payment stream, discounted at 8% annually: $1,000 at the end of year 1, $2,000 at the end of year 2, and $3,000 at the end of year 3? A. $5,022. 10 B. $5,144. 03 C. $5,423. 87 D. $5,520. 00 14. You invested $1,200 three years ago. During the three years, you earned annual rates of return of 4.8%, 9.2%, and 11.6%. What is the value of this investment today? A. $1,498. 08 B. $1,512. 11 C. $1,532. 60 D. $1,549. 19 15. You will be receiving cash flows of: $1,000 today, $2,000 at end of year 1, $4,000 at end of year 3, and $6,000 at end of year 5. What is the present value of these cash flows at an interest rate of 7%? A. $9,731. 13 B. $10,412. 27 C. $10,524. 08 D. $11,524. 91 16. A cash-strapped young professional offers to buy your car with four, equal annual payments of $3,000, beginning 2 years from today. Assuming you're indifferent to cash versus credit, that you can invest at 10%, and that you want to receive $9,000 for the car, should you accept? A. Yes; present value is $9,510.08 B. Yes; present value is $11,372.67 C. No; present value is $8,645.09 D. No; present value is $7,461.17 17. How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 20 years? Assume an interest rate of 10% and cash flows at the end of each period. A. $297.2 9 B. $1,486. 44 C. $1,635. 08 D. $2,000. 00 18. A primary market would be utilized when: A. investors buy or sell existing securities. B. shares of common stock are exchanged. C. securities are initially issued. D. a commission must be paid on the transaction. 19. You can buy silver in the: A. capital markets. B. foreign exchange markets. C. commodities markets. D. option markets. 20. Which one of the following funds provides a tax advantage to individual investors? A. Balanced funds B. Pension funds C. Bond funds D. Funds that invest in foreign countries