Financial Assignment

 Essay regarding Finance Project

Assignment 1

Q1. ) (5 points) $50 today is worth Much more than $50 another day. (Tell Accurate or False) Q2. ) $100 invested for ten years at 12% interest is worth more in FV conditions than two-hundred dollar invested for 10 years for 4% fascination. (Tell The case or False) Q3. ) Shawn wants to buy a brand new telescope. He estimates that it may take him one year to save the money and that the telescope will definitely cost $200. In a interest rate of 6%, simply how much does Shawn need to reserve today to purchase the telescope in one year? Q4. )Johnny and Darren both generate $100 working away at their individual neighbors' big farms. Johnny puts his $100 in the piggy bank that his parents gave him to motivate him to save. Darren puts his money in a savings his father and mother set up for him. The savings account compensates 3% curiosity. They both equally take their cash out after 5 years. How much additional money does Darren have than Johnny? (16/3/9/10) Q5. ) Don just received a cash gift of $50, 000 coming from his abundant eccentric uncle. He desires to set it aside to cover his girl Cynthia's college education. Cynthia will begin college or university in a decade and Don's financial expert says that she can earn seven percent interest with an investment within a special school fund. Simply how much will Don have in the fund when Cynthia begins college? В Q6. ) Cindy and Jennifer happen to be twin sisters. They have a $10,50, 000 investment earning seven percent. Cindy withdraws $2, 1000 of her money now and goes on a shopping gratify. Jennifer keeps all her money invested. After 12-15 years, when each are looking for money to put a down payment on a home, how much even more does Jennifer have? Q7. ) The Johnson is worried about their particular ability to spend college tuition for daughter Chloe. Tuition prices are currently $9, 500 annually at the condition college and have been increasing for a price of seven percent annually. Chloe will begin school in a decade. The Johnson's have $9, 500 reserve now within a college program that will make 6% per year. They recently heard about an idea to pre-pay tuition at current prices, that is pay $9, five-hundred per year of college. Should they pre-pay Chloe's initial year today or keep the money put in and pay the tuition a decade from today? How much draught beer saving in FV terms with this kind of decision? Pre-pay; 781

No longer Pre-pay; 970

Pre-pay; 970

Don't Pre-pay; 781

Don't Pre-pay; 685

Pre-pay; 685

Q8. )Juan has $22.99, 000 to get and he has simplified his decision to two purchases. Option A returns 60 per cent annually intended for 4 years, but the maximum investment he can make can be $10, 500. Option N returns 12% annually intended for 4 years and would require the complete $100, 1000. Which option produces the very best result pertaining to Juan and what is the power over the lesser option? Assume that the $90, 000 certainly not invested in Alternative A will be placed in a secure deposit container earning no interest. Option A; 1816

Option N; 9532

Option A; 9532

Option A; 19373

Option B; 1816

Option N; 19373

Q9) Rondo is in the market to get a new car. He offers narrowed his search to 2 versions. Model A costs $32, 000 and Model W costs $28, 000. With both cars he plans to pay cash and own them for 4 years before trading in for a fresh car. His research signifies that the operate in benefit for Unit A following 4 years is 60 per cent of the initial purchase price, as the trade in value intended for Model B is 45%. The interest rate is five per cent. For convenience assume that functioning and protection costs for the designs are identical. Which unit is the better decision and exactly how much " cheaper" would it be than the alternate? Model A; 4000

Unit A; 1430

Model A; 1257

Model B; 1430

Model M; 4000

Version B; 1207

10. ) College tuition has become rising for a price of 7% per year. Currently the average expenses of a express college can be $9, 500/year. Andrea's son Trevor will begin college in 12 years. Andrea's portfolio is definitely making five per cent annually. Simply how much does Hazel need to have put aside today/now to cover 4 many years of college intended for Trevor? (Note: Tuition will continue to alter annually and Andrea's portfolio balance can continue to accrue interest when Trevor is at...

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