Time Value of Money Assignments
Time Value of Money (TVM) Assignments:
1.
Calculating Interest Rates In 2011, the automobile industry announced the average vehicle selling price in the United States was $28,835. Five years earlier, the average price was $21,608. What was the annual increase in vehicle selling price?
***
Enter
5
N
Solve for
2.
I/Y
5.94%
N
Solve for
5.5%
I/Y
80
10%
I/Y
Solve for
$150,000
$40,000
PV
PMT
FV
$1,000,000
PV
PMT
FV
$488.19
Calculating Interest Rates and Future Values In 1895, the first U.S. Open Golf Championship was held. The winner’s prize money was $150. In 2003, the winner’s check was $1,080,000. What was the percentage increase in the winner’s check over this period? If the winner’s prize increases at the same rate, what will it be in 2040?
***
Enter
$150
108
N
Solve for
Enter
37
N
I/Y
8.57%
8.57%
I/Y
PV
$1,080,000
PMT
FV
$1,080,000
PV
Solve for
***
Enter
FV
24.69
N
5.
PMT
Calculating Present Values You have just received notification that you have won the $1 million first prize at the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 80 years from now. What is the present value of your windfall if the appropriate discount rate is 10 percent?
***
Enter
4.
PV
Calculating the Number of Periods You’re trying to save to buy a new $150,000 Ferrari. You have
$40,000 today that can be invested at your bank. The bank pays 5.5 percent annual interest on its accounts.
How long will it be before you have enough to buy the car?
***
Enter
3.
$28,835
$21,608
PMT
FV
$22,642,130.85
Calculating Rates of Reform Although appealing to more refined tastes, art as a collectible has not always performed so profitably. In 2011, Sothebys sold the Edgar Degas bronze sculpture Petit Danseuse de Quartorze Ans at auction for a price of $10,311,500. Unfortunately for the previous owner, he had purchased it in 2007 at a price of $12,377,500. What was his annual rate of return on
1.
Calculating Interest Rates In 2011, the automobile industry announced the average vehicle selling price in the United States was $28,835. Five years earlier, the average price was $21,608. What was the annual increase in vehicle selling price?
***
Enter
5
N
Solve for
2.
I/Y
5.94%
N
Solve for
5.5%
I/Y
80
10%
I/Y
Solve for
$150,000
$40,000
PV
PMT
FV
$1,000,000
PV
PMT
FV
$488.19
Calculating Interest Rates and Future Values In 1895, the first U.S. Open Golf Championship was held. The winner’s prize money was $150. In 2003, the winner’s check was $1,080,000. What was the percentage increase in the winner’s check over this period? If the winner’s prize increases at the same rate, what will it be in 2040?
***
Enter
$150
108
N
Solve for
Enter
37
N
I/Y
8.57%
8.57%
I/Y
PV
$1,080,000
PMT
FV
$1,080,000
PV
Solve for
***
Enter
FV
24.69
N
5.
PMT
Calculating Present Values You have just received notification that you have won the $1 million first prize at the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 80 years from now. What is the present value of your windfall if the appropriate discount rate is 10 percent?
***
Enter
4.
PV
Calculating the Number of Periods You’re trying to save to buy a new $150,000 Ferrari. You have
$40,000 today that can be invested at your bank. The bank pays 5.5 percent annual interest on its accounts.
How long will it be before you have enough to buy the car?
***
Enter
3.
$28,835
$21,608
PMT
FV
$22,642,130.85
Calculating Rates of Reform Although appealing to more refined tastes, art as a collectible has not always performed so profitably. In 2011, Sothebys sold the Edgar Degas bronze sculpture Petit Danseuse de Quartorze Ans at auction for a price of $10,311,500. Unfortunately for the previous owner, he had purchased it in 2007 at a price of $12,377,500. What was his annual rate of return on