Question

G2 P5-14 Time value Suppose you want to save money to pay for a down payment on an apartment in 5 years' time. One year from now, you will invest your $30,000 year-end bonus for the down payment. If you can invest at 15% per year, how much interest will you receive on your cash in 5 years? If you need $210,000 for the down payment, and you would like to top-up the remaining amount by investing a lump sum today, what is the amount you should invest?

Answer 1

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BONUS RECEIVED AT THE END OF THE YEAR SO INVESTED FOR 4 YEARS AND SO 4 YEARS INTEREST WILL BE RECEIVED

PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins Data - 2x A = = = V General Wrap Text FMerce Merge & Center - Center E E E s $ % % , 4.0 .00 :.: Insert Delete Format File Home Insert Page Layout Formulas % Cut Calibri 11 A Ea Copy Paste Format Painter BI U D- DA Clipboard Font BY261 - for BQ BR BS BT Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Sort & 2 Clear Filter Editing Find & Select Alignment Number Cells BV BW BX BY BZ CA CB 246 247 BU BONUS RECEIVED AT THE END OF YEAR YEARS RATE 248 30000 PV 4n 15% r 249 250 251 252 253 254 FUTURE VALUE = FUTURE VALUE = FUTURE VALUE = PV*(1+r)^n 30000*(1+0.15)^4 52470.19 ANSWER INTEREST RECEIVED 22470.19 (52470.19 - 30000] 255 256 257 258 259 260 261 262 263 AMOUNT REQUIRED FUTURE VALUE OF BONUS SHORTFALL 210000 52470.19 157529.81 264 SO FUTURE VALUE RATE YEARS LUMPSUM = PRESENT VALUE LUMPSUM = PRESENT VALUE ANSWER LUMPSUM = PRESENT VALUE CAP STRU VALUE profit marginloan with points LOCK BOX 157529.81 FV 15% r 5 n FV/(1+r)^n 157529/(1+0.15)^5 78319.75 DILUTION DOLLAR COST AVG 265 266 K p EXPONPER APR CPI ear FVA pva 52 53 v, fv, annuity ferences STATE 56 57 BOU 120% Rea -_- ELEB * OENG 31-10-2019