Week 5 Check Your Understanding

SOLUTION AT Academic Writers Bay

  • Question 1

    5.5 out of 5.5 points

    Determine the present values if $5,000 is received in the future (that is, at the end of each indicated time period) in each of the following situations:

    • 5 percent for ten years 
    Answers:

    $3,070

    $2,070

    $3,170

    $4,070

  • Question 2

    5.5 out of 5.5 points

    Determine the present values if $5,000 is received in the future (that is, at the end of each indicated time period) in each of the following situations: 7 percent for seven years.

    Answers:

    $2,114

    $4,114

    $3,114

    $1,314

  • Question 3

    5.5 out of 5.5 points

    Determine the present values if $5,000 is received in the future (that is, at the end of each indicated time period) in each of the following situations: 9 percent for four years:

    Answers:

    $4,542

    $6,542

    $2,542

    $3,542

  • Question 4

    5.5 out of 5.5 points

    Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of the first year.

    Answers:

    $38,470

    $38,578

    $34,578

    $35,878

  • Question 5

    0 out of 5.5 points

    Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years from now, if the annual discount rate is 4 percent.

    Answers:

    $5,658.28

    $5,628.19

    $5,638.29

    $5,658.19

  • Question 6

    5.5 out of 5.5 points

    Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan’s eight-year life. What would be the present value of this loan if it carried an 8.5 percent interest rate?

    Answers:

    $1,546

    $1,200

    $1,000

    $1,100

  • Question 7

    0 out of 5.5 points

    Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan’s eight-year life. What would be the present value of this loan if it carried a 10 percent interest rate?

    Answers:

    $920

    $820

    $720

    $620

  • Question 8

    5.5 out of 5.5 points

    Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan’s eight-year life. What would be the present value of the loan if the interest rate is 8 percent?

    Answers:

    $1,038

    $1,048

    $1,058

    $1,028

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