### Question details

Cash Flow Problem Sets (Willing to raise \$\$\$)
\$ 30.00

Complete the following problem sets from Chapter 5 in Microsoft® Excel®:

• 5-1
• 5-3
• 5-5
• 5-7
• 5-12
• 5-15
• 5-39 (Calculate monthly payment only)

5-1   FutureValue Compute the future value in year 9 of a \$2,000 deposit in year 1 and another \$1,500 deposit at the end of year 3 using a 10 percent interest rate. (LG5-1)

5-2   FutureValue Compute the future value in year 7 of a \$2,000 deposit in year 1 and another \$2,500 deposit at the end of year 4 using an 8 percent interest rate. (LG5-1)

5-3   Future Value of an Annuity What is the future value of a \$900 annuity payment over five years if interest rates are 8 percent? (LG5-2)

5-4   Future Value of an Annuity What is the future value of a \$700 annuity payment over six years if interest rates are 10 percent? (LG5-2)

5-5   Present Value Compute the present value of a \$2,000 deposit in year 1 and another \$1,500 deposit at the end of year 3 if interest rates are 10 percent. (LG5-3)

5-6   Present Value Compute the present value of a \$2,000 deposit in year 1 and another \$2,500 deposit at the end of year 4 using an 8 percent interest rate. (LG5-3)

5-7   Present Value of an Annuity What’s the present value of a \$900 annuity payment over five years if interest rates are 8 percent? (LG5-4)

5-8   Present Value of an Annuity What’s the present value of a \$700 annuity payment over six years if interest rates are 10 percent? (LG5-4)

5-9   Present Value of a Perpetuity What’s the present value, when interest rates are 7.5 percent, of a \$50 payment made every year forever? (LG5-5)

5-10   Present Value of a Perpetuity What’s the present value, when interest rates are 8.5 percent, of a \$75 payment made every year forever? (LG5-5)

5-11   Present Value of an Annuity Due If the present value of an ordinary, 7-year annuity is \$6,500 and interest rates are 7.5 percent, what’s the present value of the same annuity due? (LG5-6)

5-12   Present Value of an Annuity Due If the present value of an ordinary, 6-year annuity is \$8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due? (LG5-6)

Page 1245-13   Future Value of an Annuity Due If the future value of an ordinary, 7-year annuity is \$6,500 and interest rates are 7.5 percent, what is the future value of the same annuity due? (LG5-6)

5-14   FutureValue of an Annuity Due If the future value of an ordinary, 6-year annuity is \$8,500 and interest rates are 9.5 percent, what’s the future value of the same annuity due? (LG5-6)

5-15   Effective Annual Rate A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)? (LG5-7)

5-16   Effective Annual Rate A loan is offered with monthly payments and a 13 percent APR. What’s the loan’s effective annual rate (EAR)? (LG5-7)

5-17   Future Value Given a 4 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of \$1,100, \$1,200, \$1,200, and \$1,500. (LG5-1)

INTERMEDIATE PROBLEMS

5-18   Future Value Given a 5 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of \$1,000, \$1,300, \$1,300, and \$1,400. (LG5-1)

5-19   Future Value of Multiple Annuities Assume that you contribute \$200 per month to a retirement plan for 20 years. Then you are able to increase the contribution to \$300 per month for another 30 years. Given a 7 percent interest rate, what is the value of your retirement plan after the 50 years? (LG5-2)

5-20   Future Value of Multiple Annuities Assume that you contribute \$150 per month to a retirement plan for 15 years. Then you are able to increase the contribution to \$350 per month for the next 25 years. Given an 8 percent interest rate, what is the value of your retirement plan after the 40 years? (LG5-2)

5-21   Present Value Given a 6 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of \$1,000, \$1,200, \$1,200, and \$1,500. (LG5-3)

5-22   Present Value Given a 7 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of \$1,000, \$1,300, \$1,300, and \$1,400. (LG5-3)

5-23   Present Value of Multiple Annuities A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at \$1,000 per month for the next three years and then \$2,000 per month for two years after that. If the bank is charging customers 7.5 percent APR, how much would it be willing to lend the business owner? (LG5-4)

5-24   Present Value of Multiple Annuities A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at \$1,500 per month for the next three years and then \$500 per month for two years after that. If the bank is charging customers 8.5 percent APR, how much would it be willing to lend the business owner? (LG5-4)

5-25   Present Value You are looking to buy a car. You can afford \$450 in monthly payments for four years. In addition to the loan, you can make a \$1,000 down payment. If interest rates are 5 percent APR, what price of car can you afford? (LG5-4)

5-26   Present Value You are looking to buy a car. You can afford \$650 in monthly payments for five years. In addition to the loan, you can make a \$750 down payment. If interest rates are 8 percent APR, what price of car can you afford? (LG5-4)

5-27   Present Value of a Perpetuity A perpetuity pays \$100 per year and interest rates are 7.5 percent. How much would its value change if interest rates increased to 9 percent? Did the value increase or decrease? (LG5-5)

5-28   Present Value of a Perpetuity A perpetuity pays \$50 per year and interest rates are 9 percent. How much would its value change if interest rates decreased to 7.5 percent? Did the value increase or decrease? (LG5-5)

5-29   Future and Present Value of an Annuity Due If you start making \$50 monthly contributions today and continue them for five years, what’s their future value if the compounding rate is 10 percent APR? What is the present value of this annuity? (LG5-6)

5-30   Future and Present Value of an Annuity Due If you start making \$75 monthly contributions today and continue them for four years, what is their future value if the compounding rate is 12 percent APR? What is the present value of this annuity? (LG5-6)

Page 1255-31   Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow \$225 today and repay \$300 in two weeks. What is the compounded annual rate implied by this 33.33 percent rate charged for only two weeks? (LG5-7)

5-32   Compound Frequency Payday loans are very short-term loans that charge very high interest rates. You can borrow \$500 today and repay \$590 in two weeks. What is the compounded annual rate implied by this 18 percent rate charged for only two weeks? (LG5-7)

5-33   Annuity Interest Rate What’s the interest rate of a 6-year, annual \$5,000 annuity with present value of \$20,000? (LG5-8)

5-34   Annuity Interest Rate What’s the interest rate of a 7-year, annual \$4,000 annuity with present value of \$20,000? (LG5-8)

5-35   Annuity Interest Rate What annual interest rate would you need to earn if you wanted a \$1,000 per month contribution to grow to \$75,000 in six years? (LG5-8)

5-36   Annuity Interest Rate What annual interest rate would you need to earn if you wanted a \$600 per month contribution to grow to \$45,000 in six years? (LG5-8)

5-37   Add-On Interest Payments To borrow \$500, you are offered an add-on interest loan at 8 percent. Two loan payments are to be made, one at six months and the other at the end of the year. Compute the two equal payments. (LG5-8)

5-38   Add-On Interest Payments To borrow \$800, you are offered an add-on interest loan at 7 percent. Three loan payments are to be made, one at four months, another at eight months, and the last one at the end of the year. Compute the three equal payments. (LG5-8)

5-39   Loan Payments You wish to buy a \$25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be? (LG5-9)

5-40   Loan Payments You wish to buy a \$10,000 dining room set. The furniture store offers you a 3-year loan with an 11 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be? (LG5-9)

5-41   Number of Annuity Payments Joey realizes that he has charged too much on his credit card and has racked up \$5,000 in debt. If he can pay \$150 each month and the card charges 17 percent APR (compounded monthly), how long will it take him to pay off the debt? (LG5-10)

5-42   Number of Annuity Payments Phoebe realizes that she has charged too much on her credit card and has racked up \$6,000 in debt. If she can pay \$200 each month and the card charges 18 percent APR (compounded monthly), how long will it take her to pay off the debt? (LG5-10)

5-43   Future Value Given an 8 percent interest rate, compute the year 7 future value if deposits of \$1,000 and \$2,000 are made in years 1 and 3, respectively, and a withdrawal of \$700 is made in year 4. (LG5-10)

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Due on: 16 Jun, 2016 12:00:00 Asked on: 14 Jun, 2016 02:09:57
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