# finance assignment

Anonymous
account_balance_wallet \$30

Question description

I have a finance assignment and i need it to be solved. It is 6 questions and it is about finance

tutoraxel
School: University of Virginia

Attached.

TIME VALUE OF MONEY

1

Time Value of Money
Institutional affiliations

TIME VALUE OF MONEY

2
Time Value of Money

Question One:
Part a
False. Future value will be greater than Present value.

Part b
Given,
Year
1

Cash Flow
2,000

2

2,000

3

2,000

4

2,000

5

2,000

6

3,000

7

3,000

8

3,000

9

4,000

PV Factor
0.87719298
2
0.76946752
8
0.67497151
6
0.59208027
7
0.51936866
4
0.45558654
8
0.39963732
3
0.35055905
5
0.30750794
3

Required Return
PV
1754.386

14%

1538.9351
1349.943
1184.1606
1038.7373
1366.7596
1198.912
1051.6772
1230.0318
11713.542

Present Value of the Cash
Flow =

\$11,713.54

PV = \$2,000(PVIFA 14%,5 ) + \$3,000(PVIFA 14\$,3 )(PVIF 14%,5 ) +
\$4,000(PVIF 14%,9 )

Part c
3*6000 = 6000*1.15^n n =7.86 years would it take for your investment to triple = 8 years

TIME VALUE OF MONEY

3

Question Two:
Let the number of years be X.
Present value of payment of \$10 each year = 10 * (1-1/(1+7%)^X) / 7% * (1+7%)
This is equal to the lifetime membership fee of 100.
So 10 * (1-1/(1+7%)^X) / 7% *(1+7%) = 100
So 1-1/(1.07)^X = 0.654
1/(1.07)^X = 0.346
(1.07)^X = 2.891
Solving, we get X = 15.69 years, rounding up to 16 years

Question Three:
Given,
Time to college
Course duration
Current Cost
Annual Inflation
Annual Interest

Fees required in Year 1 of college
Fees required in Year 2 of college
Fees required in Year ...

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Anonymous
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