Busn380 - Week 1 Problem Set 1

Week 1: problem Set 1 1.Ben Collins plans to adulte yard a house for $65,000. If that true estate property is persuade to attach in think of 5 percent all(prenominal) category, what would its approximate value be seven days from objurgate away? dissolvent: PV * FVF or, PV (1 + .05)^n or, PV (1.05)^7 or, PV * 1.4071 or, $65,000 * 1.4071 = $91,461.50 2. At an one-year worry swan of fin percent, how long would it take for your nest egg to paradigmd? solvent: time to come Value Factor = (1 + i)^n or, FVF = (1 + .05)^14.21 or, FVF = 2.000322: Where $1,000 * 2.000322 = $2,000.3221 or, move to the nearest full-page dollar it would take 14.21 years with a 5% APR to double ones savings. 3.In the mid-1990s, selected automobiles had an comely toll of $12,000. The average cost of those same motor vehicles is instanter $20,000. What was the rate of increase for this item amid the two clock closures? Answer: Using an increment of 15 years; PV * FVF or, PV (1 + i)^n or, PV (1.0347)^15 or, $12,000 * 1.6681 = $20,017.20; Alternatively, PV (1.0346)^15 or, $12,000 * 1.6657 = $19,988.40; So, we can charm the rate of increase was in the midst of 3.46% and 3.47% each year for 15 years. 4.A family spends $28,000 a year for quick expenses. If prices increase by 4 percent a year for the next three years, what add provide the family need for its sustentation expenses? Answer: PV (1 + i)^n or, PV (1 + .

04)^3 or, $28,000 * 1.125 = $31,500 require for the familys annual living expenses. 5.What would be the per annum gelt for a soulfulness with $6,000 in savings at an annual interest rate of 5.5 percent? Answer: PV (1 + i)^n - PV or, $6,000 * 1.055 - $6,000 = $330 in yearly attainings. 6.Elaine Romberg prepares her take in income levy extend each year. A tax preparer would precaution her $60 for this service. Over a conclusion of 10 years, how very much does Elaine gain from preparing her own tax return? Assumes she can earn 3 percent on her savings. Answer: Elaine Romberg gains $708.47 over a ten year period (See dodge Below). YearContribution...If you want to overreach a full essay, edict it on our website: Ordercustompaper.com

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