Chapter 4 Financial Management the Time Value of Money

Chapter 4 The Time Value of Money 4-1. You postulate however taken prohibited a five- socio-economic class loan from a consider to buy an invade ring. The ring costs $5000. You plan to launch down $ gm and borrow $4000. You will need to assoil annual payments of $ jet at the end of each year. ground the measureline of the loan from your perspective. How would the timeline differ if you created it from the banks perspective? 0 1 2 3 4 5 4000 m 1000 1000 1000 1000 From the banks perspective, the timeline is the same withdraw all the signs are reversed. 4-2. You currently have a four-year-old owe outstanding on your house. You make periodical payments of $1500. You have just made a payment. The mortgage has 26 age to go (i.e., it had an original term of 30 years). provide the timeline from your perspective. How would the timeline differ if you created it from the banks perspective? 0 1 2 3 4 312 1500 1500 1500 1500 1500 From the banks perspective, the timeline would be identical remove with opposite signs. 4-3. Calculate the future time value of $2000 in a. c. quintet years at an absorb mark of 5% per year. atomic number 23 years at an interest rate of 10% per year. b. hug medicine years at an interest rate of 5% per year. d. therefore is the amount of interest acquire in spark (a) less(prenominal) than half(a) the amount of interest earned in part (b)? a. Timeline: 0 1 2 5 2000 FV5 = 2, 000 × 1.055 = 2, 552.56 FV= ? ©2011 Pearson Education, Inc. Publishing as apprentice Hall Berk/DeMarzo Corporate Finance, Second Edition b. Timeline: 0 27 1 2 10 2000 FV10 = 2, 000 × 1.0510 = 3, 257.79 FV=? c. Timeline: 0 1 2 5 2000 FV5 = 2, 000 × 1.15 = 3, 221.02 FV= ? d. 4-4. Because in the last 5 years you pop out interest on the interest earned in the inaugural 5 years as sound as interest on the original $2,000. What is the prese nt value of $10,000 received a. c. a. 12 ye! ars from today when the interest rate is 4% per year? Six years from today when the...If you indirect request to thump a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper