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Which of the following statements is true? I. Ralph invested $3,500 in a bank o…

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Wize University Introduction to Finance Textbook > Time Value of Money

Lump Sum Calculations

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Which of the following statements is true?
I. Ralph invested $3,500 in a bank offering 6% per year compounded once a year. After 4 years, he will have $4,418.67
II. Sarah promises to pay Mario $10,000 after 2 years. If the interest rate is 8% per year compounded once a year, Mario would give Sarah $8,357.33 now.
More Lump Sum Calculations Questions:
Mark borrowed money January 1st, 2022. The term of the loan is 5 years at 6% interest per year. If the amount to be repaid in 5 years is $50,000 how much did Mark borrow if the loan is a pure-discount loan?
Tina took out a $20,000 pure-discount loan that matures in 7 years. The rate is 6%. How much will she repay at the end of 7 years?
You just borrowed $100,000 and agreed to repay the loan plus interest in 18 months. The loan carries a 5% interest rate compounded weekly.
How much will you repay at maturity?
Round your work to at least 6 decimal places and final answer to 2 decimal places.
You just invested $50,000 into an account earning 6% per year compounded weekly. You plan to make 3 more deposits of $20,000 each at the end of months 3, 8 and 15. How much will the investment be worth at the end of the two years?
Round your final answer to 2 decimal places.
You just enrolled in a new 5-year program at Harvard that will require 3 tuition payments of $50,000 each. The first payment is due today, the second payment is due at the end of your second year and the third payment is due at the end of your fifth year. The opportunity cost of your money is 6% per year.
What is the present value of your tuition?
Round your final answer to 2 decimal places.
You just received $12,000 from an investment you made 3 years ago. How much did you invest initially if you earned a return of 5% compounded monthly?
Round your final answer to 2 decimal places.
You just invested $10,000 into an account earnings 6% per year. How much will you have in your account 5 years from now?
Round your final answer to 2 decimal places.
Tim invested $3000 in a bond that he expects to earn a 6% return per year. How much will the investment be worth after 10 years if Tim plans to sell the bond and retire?
Scott invested $5000 in a stock that he expects to earn a 10% return per year. How much will the investment be worth after 5 years?
John invested $1000 in a savings account that pays 3% interest per year. How much will the investment be worth after 5 years?
You just deposited $10,000 into a savings account that will earn 15% per year for the next 8 years and then 17% per year for the following 20 years. How much will you have in your account at the end of year 14?
How much should you invest today at 8% APR compounded weekly in order to have $50,000 in 10 years?