You are thinking of building a new machine that will save you $ 4,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 3% per year forever. What is the present value of the savings if the interest rate is 7 % per year?

Suppose you considering investing $34 to earn $4.8 every year for forever. If the annual interest rate is 6.2%, what is the NPV of this project? Suppose you considering investing $24 to earn $6.6 every year for forever. If the annual interest rate is 6.5%, what is the NPV of this project?

Suppose you invest $200 a month for 6 years into an account earning 9% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 20 years. How much will you have in the end? $ Suppose instead you didn't invest anything for the first 6 years, then deposited $200 a month for 20 years into an account earning 9% compounded monthly. How much will you have in the end?

1. How much would $10,000 due in 100 years be worth today if the discount rate were 9%? 2. You have a chance to buy an annuity that pays $2,000 at the end of each year for 5 years. You could earn 7% on your money in other investments with equal risk. What is the most you should pay for the annuity? 3. You want to buy a condo 5 years from now, and you plan to save $3,000 per year, beginning one year from today. You will deposit the money in an account that pays 8% interest. How much will you have just after you make the 5th deposit, 5 years from now?

If you expect to receive $100 in one year from now, $200 two years from now, and $150 three years from now, how much this cash flow is worth today if the interest rate is 10%?

You’d like to buy a small ranch when you retire in 38 years. You estimate that in 38 years you’ll need $9 million to do so. If your savings can earn 1.0% per month, how much will you need to save each month (for 38 years), starting next month, in order to reach your goal? Round to the nearest cent. ​[Hint: We are trying to solve for the cash flows of an annuity. The formula we need to use is dictated by whether we are given the PV or the FV of that annuity. Also, we are given the monthly interest rate, which is i/m in our formulas.]

You are considering a safe investment opportunity that requires a $1,410 investment today, and will p $780 two years from now and another $830 five years from now. a. What is the IRR of this investment? b. If you are choosing between this investment and putting your money in a safe bank account that pa an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR wit the IRR of the investment? Explain. a. What is the IRR of this investment? The IRR of this investment is %. (Round to two decimal places.)

You have an opportunity to make an investment that will pay ​$   300 at the end of the first​ year, ​$   100 at the end of the second​ year, ​$   200 at the end of the third​ year, ​$   400 at the end of the fourth​ year, and   $500 at the end of the fifth year.   a.  Find the present value if the interest rate is   9 percent. ​ (Hint: You can simply bring each cash flow back to the present and then add them up.  Another way to work this problem is to either use the   =NPV function in Excel or to use your CF key on a financial calculator   —but ​you'll want to check your​ calculator's manual before you use this key.  Keep in mind that with the   =NPV function in​ Excel, there is no initial outlay.  That​ is, all this function does is bring all the future cash flows back to the present.  With a financial​ calculator, you should keep in mind that   CF0 is the initial outlay or cash flow at time​ 0, and, because there is no cash flow at time​ 0,   CF0   =​0.) b.  What would happen to the…

I am having trouble solving this problem.  Can you please provide me with some help?  Thank you.  I appreciate it. What is the value of a promise to receive $20 5 years from today, growing by 4% forever, if the interest rate is 10% per year?

You will have $100,000 exactly 7 years from now. You began with an investment of $50,000 at Time Zero.  What rate of interest did you earn?