Chapter 4 Financial Management the Time Value of Money

Chapter 4 The Time Value of Money 4-1. You be possessed of provided taken prohibited a five- yr loan from a entrust to buy an sake ring. The ring costs $5000. You plan to amaze down $ gm and borrow $4000. You will need to begin annual payments of $ jet at the end of each year. tape 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 curtilage 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 monthly payments of $1500. You have just made a payment. The mortgage has 26 years to go (i.e., it had an original term of 30 years). signal 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 b anks 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 please mark of 5% per year. atomic number 23 years at an interest rate of 10% per year. b. hug drug years at an interest rate of 5% per year. d. thence 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 student Hall Berk/DeMarzo Corporate Finance, Second Editio n b. Timeline: 0 27 1 2 10 20! 00 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 pass water interest on the interest earned in the for the first time 5 years as sound as interest on the original $2,000. What is the present value of $10,000 received a. c. a. dozen years from today when the interest rate is 4% per year? Six years from today when the...If you indirect request to nab a full essay, order it on our website: OrderCustomPaper.com

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