Question

Calculate all of the problems in the document below in an Excel spreadsheet or on a financial calculator. Please show your work in order to get credit. For each problem, state the inputs given, what you are being asked to find (the missing input), and then use the Finance function to get the correct answer (if using Excel).

13. You are told that if you invest $15,000 per year for10 years (all payments made at the end of each year), you will have accumulated $275,000 at the end of the period. What annual rate of return is the investment offering?

14. You are offered an annuity that will pay $7,500 per year for 15 years (the first payment will be made today). If you feel that the appropriate discount rate is 8%, what is the annuity worth to you today?

15. If you deposit $25,000 a year (each deposit is made at the beginning of each year) in an account that pays an annual interest rate of 18%, what will your account be worth at the end of 15 years?

16. You plan to accumulate $500,000 over a period of 12 years by making equal annual deposits in an account that pays an annual interest rate of 6% (assume all payments will occur at the beginning of each year). What amount must you deposit each year to reach your goal?

Answer 1

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