The intent of this assignment is to demonstrate that you can calculate present and future values of a single amount or an annuity, and calculate the effective interest rate of a loan. Time value of money calculations are important for a variety of applications such as capital budgeting, financing and even assessing our personal financial needs. Additionally, you need to know the real cost of using debt whether within a company or with your own personal finances.

Use time value of money tables, Excel or a financial calculator to calculate the values for each scenario. Remember to include all inputs and outputs and clearly mark your answers on your uploaded Word doc or Excel spreadsheet.

- You invest $10,000 today at 9% per year. How much will you have in 15 years?
- What is the current value of $100,000 after 10 years if the discount rate is 12%?
- You invest $3,000 for 20 years at 11%. How much will you have after 20 years?
- How much must you set aside each year to accumulate $75,000 after 15 years? The interest rate is 10%.
- How much must you repay each year for five years to pay off a $25,000 loan that you just took out? The interest rate is 8%.
- A credit card company quotes a nominal APR (annual percentage rate) of interest of 15%. What is the effective rate of interest?

Subject | Business |

Due By (Pacific Time) | 09/27/2014 12:00 am |

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