# Corporate financing- What is the future value of $4,515 invested for 18 years

**Question 1**

1. What is the future value of $4,515 invested for 18 years at 19% if interest is compounded semi-annually? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

**Question 2**

1. If the effective rate is 10%. What is the nominal rate if compounding is daily. Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

**Question 3**

1. Assume interest rate of 4%. Suppose that you receive $97,648 at the end of each year for 4 years. Suppose that this cash flow starts at the end of the fourth year. Compute the present value.

Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

**Question 4**

1. What is the future value of annual payments of $6,088 for 9 years at 5 percent?

**Question 5**

1. How much do you need to invest today in order to have $3,005 at the end of 15 years if you are sure to earn an interest at the rate of 13%, if interest is compounded monthly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

**Question 6**

1. The ABC Company is considering a new project which will require an initial cash investment of $10,300. The projected cash flows for years 1 through 4 are $9,310, $8,623, $8,318, and $5,586, respectively. If the appropriate discount rate is 10%, compute the NPV of the project.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

**Question 7**

1. What should you be willing to pay in order to receive $975 annually forever, if you require 9% per year on the investment?

Just enter the number up to 2 decimal points. Do not enter $ in the answer box.

**Question 8**

1. How many years it will take to grow your money from $3,482 to $8,844 if you can earn an interest of 18% compounded quarterly? Note: Do not write “years” in your answer. Simply write the number in the answer box.

**Question 9**

1. What is the future value of $2,673 invested for 7 years at 13% if interest is compounded semi-annually (twice a year)? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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**Question 10**

1. If you can double your money in 29 years, what is the implied annual rate of interest, given that compounded semi-annually? Note: give your answer in percentages. Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

**Question 11**

1. If you receive $292 at the end of each year for the first three years and $822 at the end of each year for the next three years. What is the present value? Assume interest rate is 8%.

Hint: This is an uneven cash flow problem. Use the CF function and solve for NPV to get the answer.

Just enter the number up to 2 decimal points. Do not enter $ in the answer box.

**Question 12**

1. How many years it will take you to double your money if you can earn 19% each year, given that compounding is quarterly? Note: Do not write “years” in your answer. Simply write the number in the answer box.

**Question 13**

1. What is the future value of $6,679 for 11 years at 7 percent if interest is compounded semi-annually? Note: Do not enter “$” in your answer. Simply write down the number that you get as your answer.

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**Question 14**

1. How many months it will take to grow your money from $3,889 to $7,755 if you can earn an interest of 7% compounded monthly? Note: Do not write “months” in your answer. Simply write the number in the answer box.

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**Question 15**

1. How much do you need to invest today in order to have $6,101 at the end of 19 years if you are sure to earn an interest at the rate of 10%, if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

**Question 16**

1. Assume interest rate of 4%. A company receives cash flows of $80,319 at the end of years 4, 5, 6, 7, and 8, and cash flows of $258,102 at the end of year 10. Compute the future value of this cash flow stream.

Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

**Question 17**

1. The Perpetual Life Insurance Co is trying to sell you an investment policy that will pay you and your heirs $14,113 per year forever. Suppose the Perpetual Life Insurance Co. told you the policy costs $187,666. At what interest rate would this be a fair deal? Just enter the number in percentages up to 2 decimal points. Do not enter % in the answer box.

**Question 18**

1. Today, you are purchasing a $1,962 14-year car loan at 6 percent. You will pay annually at the end of each year. What is the amount of each payment?

**Question 19**

1. How many years it will take you to quadruple (means 4 times) your money if you can earn 4.48% each year? Note: Do not write “years” in your answer. Simply write the number in the answer box.

**Question 20**

1. What is the effective rate of 12% compounded monthly?

Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

**Question 21**

1. How many years it will take to grow your money from $4,115 to $7,930 if you can earn an interest of 6% compounded monthly? Note: Do not write “years” in your answer. Simply write the number in the answer box.

**Question 22**

1. If you can double your money in 21 years, what is the implied annual rate of interest, given that compounded in quarterly? Note: give your answer in percentages. Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

**Question 23**

1. Barrett Pharmaceuticals is considering a drug project that costs $175,337 today and is expected to generate end-of-year annual cash flows of $11,818, forever. At what discount rate would Barrett be indifferent between accepting and rejecting the project?

Just enter the number in percentages up to 2 decimal points. Do not enter % in the answer box.

**Question 24**

1. Say, you deposit $4,007 in a bank for 18 years. What is the amount you will have in the bank at the end of 18 years if interest of 4 % for first 9 years and interest of 10 % for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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**Question 25**

1. What is the future value of quarterly payments of $517 for 9 years at 6 percent?

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**Question 26**

1. How much do you need to invest today in order to have $12,326 at the end of 11 years if you are sure to earn an interest at the rate of 5%? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

**Question 27**

1. Say, you deposit $2,338 in a bank for 17 years. What is the amount you will have in the bank at the end of 17 years if interest of 7 % compounded monthly for first 7 years and interest of 7 % compounded quarterly for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

**Question 28**

1. What is the future value of $4,002 invested for 4 years at 10% if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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**Question 29**

1. The ABC Company is considering a new project which will require an initial cash investment of $6,291. The project will produce no cash flows for the first 5 years. The projected cash flows for years 6 through 9 are $2,530, $4,457, $6,743, and $4,256, respectively. If the appropriate discount rate is 10%, compute the NPV of the project.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

**Question 30**

1. Kelly starting setting aside funds 9 years ago to buy some new equipment for her firm. She has saved $3,637 each quarter and earned an average rate of return of 10 percent. How much money does she currently have saved for this purpose?

**Question 31**

1. If you can triple your money in 11 years, what is the implied rate of interest? Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box..