I need to pay $4000 a year for 6 years starting 7 years from now. How much
Question:
I need to pay $4000 a year for 6 years starting 7 years from now. How much do I need to deposit in a bank one year from today to meet this obligation. Bank interest rate is 5%.
I borrowed $100,000 at 9%. I make monthly payments of $900 (the first payment will occur in one month).
After how many years will my loan be paid off?
I can earn 5% on my deposits. How long will it take for me to double my money?
Suppose that I paid $500 for a bottle of rare wine. I hope to sell this bottle for $600 two years later. What is my rate of return on this investment?
If the appropriate opportunity cost of capital for this wine is 12%, what is the present value of my expected sale price?
I need to save every year starting in year 1 and ending in year 5 to save $50,000 as a down payment on a house that I will buy in year 6.
How much do I need to save in years 1 to 5 if bank pays 3%.
You wish to set up a trust for the education of your child (four years undergraduate education plus three years of law school or a total of 7 years). The trust will pay its beneficiary $100,000 a year starting from Year 6 until Year 12.
You anticipate the interest rate will be 5%.If you set aside a lump sum at Year 0 for the trust, how much should it be?
Money Banking and Financial Markets
ISBN: 978-0078021749
4th edition
Authors: Stephen Cecchetti, Kermit Schoenholtz