# Finance problems

**FIN/370 week 2**

**Cash Flow Problem Sets**

** **

**Complete **the following problem sets from Chapter 5 in Microsoft^{®} Excel^{®}:

- 5-1
- 5-3
- 5-5
- 5-7
- 5-12
- 5-15
- 5-39 (Calculate monthly payment only)

· **5-1** **FutureValue** Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate.

· **5-3** **Future Value of an Annuity** What is the future value of a $900 annuity payment over five years if interest rates are 8 percent?

· **5-5** **Present Value** Compute the present value of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 if interest rates are 10 percent.

· **5-7** **Present Value of an Annuity** What’s the present value of a $900 annuity payment over five

· **5-12** **Present Value of an Annuity Due** If the present value of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due?

· ** 5-15** **Effective Annual Rate** A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)?

· **Loan Payments** You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be?

**Answers 3**

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**5-1****FutureValue**Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate.**5-3**…**FIN/370 week 2****Cash Flow Problem Sets****Complete**the following problem sets from Chapter 5 in Microsoft^{®}Excel^{®}:- 5-1
- 5-3
- 5-5
- 5-7
- 5-12
- 5-15
- 5-39 (Calculate monthly payment only)

**5-1**…