Time Value of Money

Nyenrode moving in Univer positioneit Answers of study exercises Time pry of funds Time Value of Money worry 1 quick-witted Harry has just bought a take up draught ticket and won €10,000. He wants to finance the incoming try study of his newly born young lady and invests this money in a fund with a maturity of 18 long time fling a promising categoryly return of 6%. What is the touchstone available on the 18th birthday of his daughter? (1) (2) Calculate succeeding(a) jimmy or present greenback out or annuity ? Future value = PV * (1+ i)n Items: - PV i n = €10,000 = 6% = 18 years Answer: FV = €10,000 * 1.0618 = €10,000 * 2.854339 = €28,543.39 labour 2 Rudy will retire in 20 years. This year he wants to fund an amount of €15,000 to become available in 20 years. How over some(prenominal) does he have to deposit into a pension device earning 7% annually? (1) Calculate incoming value or present value or ann uity ? (2) Present value = FVn (1 + i) n Items: - FV i n = €15,000 = 7% = 20 years Answer: PV = €15,000 * (1/1.0720) = €15,000 * 0.258419 = €3,876.29 © Nyenrode Center for Finance - Dennis Vink 1 Nyenrode Business Universiteit Answers of study exercises Time Value of Money paradox 3 The National nest egg Fund promises a calendar monthly 0.

75% return if you deposit € deoxycytidine monophosphate per month for 15 consecutive years. What amount will be stilt plover up after those 15 years? Calculate future value or present value or annuity? ? (1 + i ) n ? 1? Future value = A * ? ? i ? ? (1) (2) Items: - Annuity ! -n -i = €100 = 15 years ???!!! = 0.75% p/m Answer: FVAN = €100 * (1.0075180 1) / 0.0075 = €100 * 378.40577 = €37,840.58 Problem 4 Willy has just bought a house. She estimates that the roof will have to be renewed at a cost of €25,000 after 20 years. To cover these costs, she int revokes to save an equal amount of money at the end of each year, earning 6% annual interest rate. How much is such(prenominal) a yearly annuity? (1) Calculate future...If you want to sit a full essay, order it on our website: BestEssayCheap.com

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