Saved B D G H You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $450,000 per year. Thus, in one year, you receive $1.45 million. In two years, you get $1.9 million, and so on. If the appropriate interest rate is 7 percent, what is the present value of your winnings? Year Cash flow 1,000,000 1,450,000 1,900,000 2,350,000 2,800,000 8 0 - O UA W N- O 3,250,000 3,700,000 4,150,000 4,600,000 5,050 000 5,500,000 Discount rate 7% Complete the following analysis. Do not hard code values in your calculations. a O W6252+myclassroom. Saved A D E F G H You want to be a millionaire when you retire in 40 years. How much do you have to save each month if you can earn an annual return of 10.5 percent? How much do you have to save each month if you wait 10 years before you begin your deposits? 20 years? Amount needed $ 1,000,000 Years to save 40 Months per year 12 APR 10.5% Years to wait before beginning Years to wait before beginning 10 Years to wait before beginning 20 Complete the following analysis. Do not hard code values in your calculations. All answers should be positive. Monthly deposit if you begin today Monthly deposit if you wait 10 years Monthly deposit if you wait 20 years aSaved Fowler Credit Bank is offering 6.7 percent compounded daily on its savings accounts. If you deposit $7,000 today, how much will you have in the account in 5 years? In 10 years? In 20 years? Interest rate 6.70% Times compounded per year 365 Deposit 7,000 Number of years 5 Number of years 10 Number of years 20 Complete the following analysis. Do not hard code values in your calculations. All answers should be positive. Value in 5 years Value in 10 years Value in 20 years Sheet1 + d O WSaved Font Styles X V fx B C D E F G H If you deposit $4,000 at the end of each of the next 20 years into an account paying 9.7 percent interest, how much money will you have in the account in 20 years? How much will you have if you make deposits for 40 years? Annual deposit 4,000 Number of years 20 Interest rate on annuity 9.7% Number of years 40 Complete the following analysis. Do not hard code values in your calculations. All answers should be positive. Future value for 20 years Future value for 40 years a W XX V B C D H Beginning three months from now, you want to be able to withdraw $2,200 each quarter from your bank account to cover college expenses over the next four years. If the account pays .43 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years? Quarterly withdrawal 2,200 Quarters per year 4 Number of years 4 Interest rate per quarter 0.43% Complete the following analysis. Do not hard code values in your calculations. Your answer should be positive. Amount needed today a O Wships%253A%2521%252Fmyclassroom.cput.a Saved B D H What is the future value of $2,400 in 17 years assuming an interest rate of 7.9 percent compounded semiannually? Deposit $ 2,400 Number of years 17 Interest rate 7.9% Times compounded per year 2 Complete the following analysis. Do not hard code values in your calculations. Your answer should be positive. Future value a O w XSaved BIU - - - A - Alignment Number Conditional Format as Cell Cells Editing Formatting . Table . Styles . oard Font Styles . .. X V B C D E F G H First National Bank charges 12.4 percent compounded monthly on its business loans. First United Bank charges 12.7 percent compounded semiannually. As a potential borrower, which bank would you go to for a new loan? Complete the following analysis. Do not hard code values in your calculations. Times compounded Stated rate (APR) per year Effective rate (EAR) First National Bank 12.4% 12 First United Bank 12.7% N a O XSaved C D G H One of your customers is delinquent on his accounts payable balance. You've mutually agreed to a repayment schedule of $500 per month. You will charge 1.5 percent per month interest on the overdue balance. If the current balance is $18,000, how long will it take for the account to be paid off? Monthly payment 500 Discount rate 1.5% Current balance $ 18,000 Complete the following analysis. Do not hard code values in your calculations. Number of months until paid off a O Wext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fmyclassro Saved B D E G H 1,000,000 1,450,000 1,900,000 2,350,000 2,800,000 5 0 0 N O UA W N - On 69 69 69 69 69 69 69 69 69 69 69 3,250,000 3,700,000 4, 150,000 4,600,000 5,050,000 5,500,000 Discount rate 7% Complete the following analysis. Do not hard code values in your calculation Value of all cash flows beyond today Value of all cash flows including cash flow today a Wn/ext/map/index.html?_con=con&external_browser =0&launchUrl=https%253A%2521%252Fmyclassroom.cput.a Saved B D E G H You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of .5 percent per year, compounded monthly for the first six months, increasing thereafter to 18.5 percent compounded monthly. Assuming you transfer the $7,000 balance from your existing credit card and make no subsequent payments, how much interest will you owe at the end of the first year? First APR 0.5% Periods for first APR 6 Second APR 18.5% Periods for second APR 6 Balance transferred 7,000 Months per year 12 Complete the following analysis. Do not hard code values in your calculations. All answers should be positive. Balance in six months Balance in one year Accrued interest a O W X