### 1)You would like to take a cruise in six years. The cruise currently costs $4,250. You expect the price to

1)You would like to take a cruise in six years. The cruise currently costs $4,250. You expect the price to increase by 4% annually. You can earn 5% on your savings. How much do you need to save at the end of each month so you will be able to afford your cruise in six

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### Explain how annuities affect TVM problems and investment outcomes with the impact of the following items listed below – this does not have to be exstensively long

Explain how annuities affect TVM problems and investment outcomes with the impact of the following items listed below – this does not have to be exstensively long a. Interest Rates and Compounding b. Present Value (of a future payment received) c. Future Value (of an investment) d. Opportunity cost e. Annuities and the Rule of

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### 23. Annuities and Interest Rates. Professor’s Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of

23. Annuities and Interest Rates. Professor’s Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $80,000 at age 65, the firm will pay the retiring professor $600 a month until death. a. If the professor’s remaining life expectancy is 20 years, what is the monthly rate on this annuity? What is

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### Jane is a finance major at a university and has a $600 overdue debt for books and supplies at the bookstore. She has only $200 in

Jane is a finance major at a university and has a $600 overdue debt for books and supplies at the bookstore. She has only $200 in her checking account and doesn’t want her father to know about this debt. The manager at the bookstore tells her that she may settle the account in one of

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### I want to buy a car. I can get a loan for $6,000.00 at a 12% interest rate. I can afford $230.00

I want to buy a car. I can get a loan for $6,000.00 at a 12% interest rate. I can afford $230.00 a month for payments. How long will it take me to pay off the loan.

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### You deposit $1,000 in your bank account. If the bank pays 4 percent simple interest, how much will

You deposit $1,000 in your bank account. If the bank pays 4 percent simple interest, how much will you accumulate in your account after 10 years? What if the bank pays compound interest? How much of your earnings will be interest on interest?

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### What is the present value today of your projected monthly retirement check of $2,000

What is the present value today of your projected monthly retirement check of $2,000 (your estimate which you will receive when you reach 65)? You turn 65 in 25 years and you think inflation will be 6 percent a year between now and your retirement.

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### What is the concept that money

What is the concept that money has time value?

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### 2. You have determined the profitability of a planned project by finding the present value of all the cash flow from

2. You have determined the profitability of a planned project by finding the present value of all the cash flow from that project. Which of the following would cause the project to look less appealing, that is, have a lower present value? a. The discount rate decrease. b. The Cash flows are extended over a

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### Problem #1 Smolinski company is considering an investment which will return a lump sum of

Problem #1 Smolinski company is considering an investment which will return a lump sum of $5000,000 five years from now. What amount should simolinski company pay for this investment to earn a 15% return. Problem #2 Kilarny company is considering investing in an annuity cintract that will return $20,000.00 annually at the end of each

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