What is the future value of $2,944 invested for 9 years at 6.00 percent compounded annually?

One year ago, you invested $3,140. Today it is worth $3,700.50. What rate of interest did you earn?

Some time ago, Julie purchased eleven acres of land costing $15,190. Today, that land is valued at $59,547. How long has she owned this land if the price of the land has been increasing at 5 percent per year?

First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. |

If you made a $61,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years |

Compute the future value of $1,000 compounded annually for 20 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |

Future value | $ |

b. |
Compute the future value of $1,000 compounded annually for 15 years at 9 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |

Future value | $ |

c. |
Compute the future value of $1,000 compounded annually for 25 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |

Future value | $ |

For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): |

Present Value | Years | Interest Rate | Future value | |||||

$ | 12 | 6 | % | $ | 15,951 | |||

3 | 12 | 56,557 | ||||||

28 | 13 | 891,073 | ||||||

30 | 10 | 555,164 |

Wilkinson Co. has identified an investment project with the following cash flows: |

Year | Cash Flow | |||||

1 | $ | 750 | ||||

2 | 990 | |||||

3 | 1,250 | |||||

4 | 1,350 | |||||

If the discount rate is 7 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |

Present value | $ |

If the discount rate is 18 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |

Present value | $ |

If the discount rate is 24 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |

Present value | $ |

Four months ago, you purchased 1,400 shares of Lakeside Bank stock for $25.44 a share. You have received dividend payments equal to $.58 a share. Today, you sold all of your shares for $26.44 a share. What is your total dollar return on this investment?

Suppose a stock had an initial price of $56 per share, paid a dividend of $1.60 per share during the year, and had an ending share price of $66. |

Compute the percentage total return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |

Total return | % |

You’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 18 percent, –14 percent, 20 percent, 22 percent, and 10 percent. Suppose the average inflation rate over this period was 3.1 percent, and the average T-bill rate over the period was 4.4 percent. |

a. |
What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |

Average real return | % |

b. |
What was the average nominal risk premium on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) |

Average nominal risk premium | % |