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Business Math Homework 12
Jim Ryan, an
owner of a Burger King
restaurant, assumes that his restaurant will need a new roof in 7 years.
He estimates the roof will cost him $9,000 at that time. What amount should Jim invest today at 6% compounded quarterly to be able to pay for the roof? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount to be invested $5931.90. Tony Ring wants to attend Northeast College. If he deposits $37,644 today, how much will he have 4 years from now at 12% interest compounded semiannually? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) Amount $59,997 Jackie Rich would like to buy a $26,995 Toyota hybrid car in 4 years. Jackie wants to put the money aside now. Jackie's bank offers 8% interest compounded semiannually. How much must Jackie invest today? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Investment $19,725.25 Pete Air wants to buy a used Jeep in 5 years. He estimates the Jeep will cost $15,000. Assume Pete invests $10,000 now at 12% interest compounded semiannually. a. Calculate the maturity value of the investment. (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) b. Will Pete have enough money to buy the Jeep at the end of 5 years? a. Maturity value $17,908.00 b. Yes Lee Holmes deposited $15,000 in a new savings account at 9% interest compounded semiannually. At the beginning of year 4, Lee deposits an additional $40,000 at 9% interest compounded semiannually. At the end of 6 years, what is the balance in Lee's account? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Balance $77,531.78 After reviewing the CPI inflation calculator at inflationdata.com, Hanna Lind realized the importance of creating an investment plan for her future. She would need $9,691.50 in 2015 to have the same purchasing power her $7,000, (Stored in a fireproof safe in her home since 2010) had when she put it there. To protect her savings against further inflation and to help her prepare for a healthy financial future, Hanna deposits her $7,000 in an investment account in 2015 earning 6% interest compounded quarterly. How much will Hanna have in her account in 2025? (Use the Table provided.) Amount $12,698 Sam Long anticipates he will need approximately $225,000 in 15 years to cover his 3-year-old daughter's college bills for a 4-year degree. How much would he have to invest today at an interest rate of 8 percent compounded semiannually? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount $69,367.50 Tony Ring wants to attend Northeast College. He will need $60,000 4 years from today. Assume Tony's bank pays 12% interest compounded semiannually. What must Tony deposit today so he will have $60,000 in 4 years? (Use the Table provided.) (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Amount to be deposited $37,644. Chapter Tests 01 02 03 04 05
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Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Need A Tutor? Need Homework Help? The International Monetary Fund is trying to raise $500 billion in 5 years for new funds to lend to developing countries. At 6% interest compounded quarterly, how much must it invest today to reach $500 billion in 5 years? (Use the Table provided.) (Do not round intermediate calculations. Enter your answer in billions of dollar rounded to 2 decimal places.) Present Value $ 371.25 billion Paul Havlik promised his grandson Jamie that he would give him $6,000 8 years from today for graduating from high school. Assume money is worth 6% interest compounded semiannually. What is the present value of this $6,000? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value $3739.20 Lee Wills loaned Audrey Chin $16,000 to open Snip Its Hair Salon. After 6 years, Audrey will repay Lee with 8% interest compounded quarterly. How much will Lee receive at the end of 6 years? (Use the Table provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount received $25,734.40 Lance Jackson deposited $5,000 at Basil Bank at 9% interest compounded daily. What is Lance's investment at the end of 4 years? (Use Table 12.2.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Investment $7166.50 Lynn Ally, owner of a local Subway shop, loaned $40,000 to Pete Hall to help him open a Subway franchise. Pete plans to repay Lynn at the end of 8 years with 6% interest compounded semiannually. How much will Lynn receive at the end of 8 years? (Use the Table provided.) (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Receive $64188 Pete's Real Estate is currently valued at $65,000. Pete feels the value of his business will increase at a rate of 10% per year, compounded semiannually for the next 5 years. At a local fundraiser, a competitor offered Pete $70,000 for the business. If he sells, Pete plans to invest the money at 6% compounded quarterly. What price should Pete ask? (use Table 1 and Table 2 provided.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Price $78,614.79 You are the financial planner for Johnson Controls. Assume last year's profits were $700,000. The board of directors decided to forgo dividends to stockholders and retire high-interest outstanding bonds that were issued 5 years ago, at a face value of $1,250,000. You have been asked to invest the profits in a bank. The board must know how much money you will need from the profits earned to retire the bonds in 10 years. Bank A pays 6% compounded quarterly, and Bank B pays 612% compounded annually. (use Table 1 and Table 2 provided.) (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) a-1. Which bank would you recommend? a-2. How much of the company's profit should be placed in the bank? b. If you recommended that the remaining money not be distributed to stockholders but be placed in Bank B, how much would the remaining money be worth in 10 years? a-1: Bank B a-2: Profit $665875 b. Future Value $64056.04 |
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