Q 1 It is estimated that 7 years from now the total cost for one year of
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Q 1 | It is estimated that 7 years from now the total cost for one year of college will be $40,000. How much must be invested today in a Bank deposit paying 10% annual interest in order to accumulate the needed $40,000? |
Q 2 | You need to purchase a computer to begin the MBA program next year at UOWD. If the computer will cost $3,750, how much money would you need in the bank as of today assuming the bank pays 12% interest per annum, to be able to purchase the computer? |
Q 3 | UOWD students typically receive a signing bonus when they agree to full time employment upon completion of the MBA program. For the class of 2024, the signing bonus averaged nearly $20,000. Recently, the average signing bonus has gone up by about $2,000 per year, so that in two years, the average signing bonus is expected to reach $24,000. Using a discount rate of 10.00% and assuming the signing bonus is paid in exactly two years, what is the present value of the average bonus for the class of 2026? |
Q 4 | Your accident-prone friend John got into yet another car accident. Fortunately, John has good attorneys. As part of the settlement for his most recent injuries, John has a choice of taking $250,000 in cash now, or receiving 10 annual payments of $35,000. John, although a reckless driver, is a somewhat risk-averse investor who uses a 6% discount rate. Which settlement offer should John take? |
Q 5 | What will the $25000 be worth 5 years from now at an annual 10% Return? |
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