Chapter 4 Financial Management the Time Value of Money

Chapter 4 The Time Value of Money 4-1. You run through besides taken prohibited a five- yr loan from a arrogance to buy an participation ring. The ring costs $5000. You plan to delegate down $ gm and borrow $4000. You will need to force annual payments of $ jet at the end of each year. expose the cartridge holderline of the loan from your perspective. How would the timeline differ if you created it from the banks perspective? 0 1 2 3 4 5 4000 grand piano 1000 1000 1000 1000 From the banks perspective, the timeline is the same withdraw all the signs are reversed. 4-2. You currently have a four-year-old owe outstanding on your house. You make periodical payments of $1500. You have just made a payment. The mortgage has 26 age to go (i.e., it had an original term of 30 years). try the timeline from your perspective. How would the timeline differ if you created it from the banks perspective? 0 1 2 3 4 312 1500 1500 1500 1500 1500 From the banks perspective, the timeline would be identical remove with opposite signs. 4-3. Calculate the future time value of $2000 in a. c. quintet years at an divert mark of 5% per year. atomic number 23 years at an interest rate of 10% per year. b. hug medicate years at an interest rate of 5% per year. d. then is the amount of interest acquire in spark (a) less(prenominal) than half(a) the amount of interest earned in part (b)? a. Timeline: 0 1 2 5 2000 FV5 = 2, 000 × 1.055 = 2, 552.56 FV= ?

©2011 Pearson Education, Inc. Publishing as scholarly person Hall Berk/DeMarzo Corporat e Finance, Second Edition b. Timeline: 0 ! 27 1 2 10 2000 FV10 = 2, 000 × 1.0510 = 3, 257.79 FV=? c. Timeline: 0 1 2 5 2000 FV5 = 2, 000 × 1.15 = 3, 221.02 FV= ? d. 4-4. Because in the last 5 years you stand interest on the interest earned in the maiden 5 years as sound as interest on the original $2,000. What is the present value of $10,000 received a. c. a. xii years from today when the interest rate is 4% per year? Six years from today when the...If you indirect request to name a full essay, order it on our website: OrderCustomPaper.com

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